Fri02232018

LAST_UPDATEThu, 22 Feb 2018 11pm

Malaysian Aerospace Eyes RM1b New Investments, RM13b Revenue This Year

Pic: ReutersPic: Reuters

SINGAPORE: Malaysia’s aerospace sector is optimistic of securing RM1 billion new investments and generate RM13 billion revenue this year.

Exports are targeted to grow by five per cent – particularly through manufacturing activities for aerospace products, such as fan cowl, cargo door and engine fan case.

Ministry of International Trade and Industry’s (MITI) Deputy Secretary-General (Industry), Datin K. Talagavathi, said generally, Malaysia’s aerospace industry has been experiencing tremendous growth for the past two decades.

“We are the top in the region for aerostructure manufacturing, following the creation of world-class infrastructure and facilitative environment.

“Avionics and aerostructure manufacturing is on the upward trend, while aeroengine components manufacturing is starting to pick up pace.” she said.

Talagavathi said this to Bernama at the Singapore Airshow 2018. It is held from Feb 6-11, 2018 where over 50 Malaysian delegates are participating in Malaysian Pavillion, hosted by the National Aerospace Industry Coordinating Office (NAICO), a unit under MITI.

Talagavathi said aerospace exports up to September, 2017 stood at RM6.23 billion, a 20 per cent increase from 2016’s RM5.53 billion, primarily contributed by aerospace parts and components to countries such as the US, UK, Singapore, Japan and Thailand.

“The increase was not only bolstered by export growth in aerospace parts and components manufacturing, but also the maintenance, repair & overhaul (MRO) activities,” she said.

She said the MRO sector was expected to grow further, particularly for airframe, engine and component MRO.

For 2018, this sub-sector was expected to contribute RM6.7 billion of annual revenue. In 2016, MRO activities contributed RM5.7 billion revenue, she said.

Talagavathi said MITI was actively promoting world-class aerospace parks – KLIA Aeropolis, Subang Aerotech Park, UMW High-Value Manufacturing Park Serendah, Senai Airport Aviation Park – to potential investors.

“We are optimistic the aerospace industry will continue to be vibrant and thrive in years to come, given that the Asia-Pacific is expected to have the highest growth in new aircraft delivery for the next decade,” she said.

In 20 years, original equipment manufacturers (OEMs), namely Airbus and Boeing, forecast significant new aircraft delivery, particularly to Asia-Pacific countries.

Airbus forecast 35,000 new aircraft delivery, of which 41 per cent was for Asia-Pacific, while Boeing targeted 41,000 new aircraft would be required, with 39 per cent of the figure for Asia.

There is huge demand for aviation services in the Asia-Pacific too.

In total, 16,000 new aircraft were expected to be delivered to Asia – making it the largest aerospace market in 2036 and this is the main factor for OEMs to consider shifting their production base to this region.

To-date, the industry has produced 200 over companies, employed more than 21,000 skilled workers and anticipated to create another 1,000 jobs this year.

Some of the major local companies are CTRM Aero Composite, which is the single source supplier for manufacturing & supply of Airbus A350 fan cowl; SME Aerospace, which offers a comprehensive metal fabrication, machining, treatments and assembly of aerospace parts and components for global OEMs and Tier-1 companies; and, UMW Aerospace, which has delivered six fan cases for the Rolls-Royce’ Trent 1000 in 2017, which positioned Malaysia as a producer of aero engine parts

In recent years, some multinational companies – Airbus Group, Spirit AeroSystems, Safran Landing Systems, Honeywell Aerospace Avionics, Singapore Aerospace Manufacturing, GE Aviation and UTC Aerospace Systems – had also established and expanded their operations in Malaysia.

Talagavathi said MITI, through its agencies, would also continue to develop potential local small and medium enterprises (SMEs) to be part of the aerospace global supply chain.

“This year another 10 local SMEs will be nurtured. We already developed 20 under the Entry-Point Project 8: Developing SMEs in the Global Aerospace Manufacturing Industry.

“It targets to increase the gross national income to RM454 million by 2020 and create 4,100 job openings by 2020,” she said.

Meanwhile, Head of NAICO, Shamsul Kamar Abu Samah, said the target was to create more sophisticated entrepreneurs, not just traders.

“These entrepreneurs would offer higher value service and products and become the preferred outsourcing centre by the OEMs,” he said.

Moving forward, he said, there would be more collaborations with other countries and firms to expand Malaysia’s capabilities, develope the ecosystem and have better development programmes.

“We’re also exploring other areas besides aerostructures and engine component such as cabin interiors and other local solutions for global aviation players,” Shamsul said.

Malaysia Aerospace Industry Blueprint 2030 targeted to capture five per cent of the global MRO market share, while for manufacturing the country wanted to be the number one producer of parts and components in Southeast Asia, he said.

“We also want to be 70 per cent self-reliant in system engineering, and for engineering services, we want to capture 3.5 per cent of the global market share, and the number one supplier of skilled aerospace talent in Southeast Asia.

“Malaysia has the infrastructure and the tailored aero parks, attractive incentive packages, the necessary talents, and the cost of doing business is competitive,” he said.

NAICO and and other MITI agencies would also continue to promote the development of the aerospace industry through a number of initiatives, including participation at global aerospace events such as the current Singapore Airshow 2018, Farnborough International Airshow 2018 and Japanese Aerospace Exhibition 2018.

Other initiatives such as organising export acceleration programme, the Kuala Lumpur International Aerospace Business Convention 2018, and also participating in Aeromart Seattle 2018 and Malaysia Aerospace Summit 2018 are also in the pipeline.

- Bernama