Sikorsky Aircraft Corp. and Tata Advanced Systems Ltd. (TASL) today announced creation of a joint venture that will manufacture aerospace components for Sikorsky in India, including components for S-92® helicopter cabins. The joint venture agreement builds upon a long-term contract signed in Jun 2009 for TASL to assemble Sikorsky S-92® helicopter cabins. Sikorsky is a subsidiary of United Technologies Corp. (UTX) and TASL is a wholly owned subsidiary of Tata Sons.

Both the joint venture agreement and the cabin assembly contract stem from a MOU signed in Feb 2007 by the companies to explore the creation of aerospace operations in India. The cabin assembly contract signed in June 2009 has led to ongoing construction in Hyderabad, in the state of Andhra Pradesh, where TASL will assemble S-92 helicopter cabins starting in 2010. 

The new joint venture will be positioned to manufacture components for other aerospace Original Equipment Manufacturers (OEMs) as well as detailed parts for the Sikorsky S-92® helicopter cabin. It is expected that the joint venture operations will be housed in a second greenfield facility that will be constructed in Hyderabad, next to the cabin assembly building. Construction for the joint venture company’s facility is targeted for completion by 2011, with production beginning in late 2012.

Tata companies operate in seven business sectors: communications and information technology, engineering, materials, services, energy, consumer products and chemicals. They are, by and large, based in India and have significant international operations. The total revenue of Tata companies, taken together, was $70.8 billion in 2008-09, with 64.7% of this coming from business outside India, and they employ around 357,000 people worldwide.
United Technologies provides high technology products and services to the building systems and aerospace industries worldwide. Operating units include businesses with operations throughout the world. Otis, Carrier and UTC Fire & Security (collectively referred to as the commercial businesses) serve customers in the commercial and residential property industries worldwide; Carrier also serves commercial, industrial, transport refrigeration and food service equipment customers.

Pratt & Whitney, Hamilton Sundstrand and Sikorsky (collectively referred to as the aerospace businesses) primarily serve commercial and government customers in both the original equipment and aftermarket parts and services markets of the aerospace industry; Hamilton Sundstrand and Pratt & Whitney also serve customers in certain industrial markets. Major competitor is Boeing Co. (BA).
We currently have a Neutral recommendation on UTX.

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