Aerospace sector expected to draw RM1b new investments
Avionics and aerostructure manufacturing on upward trend, aero-engine component segment starting to pick up pace
MALAYSIA’S aerospace sector is expected to rake in RM1 billion in new investments and generate about RM12.7 billion in revenue this year.
International Trade and Industry Ministry deputy secretarygeneral (industry) Datin K. Talagavathi said the aerospace sector had been identified as a strategic industry under the Malaysian Aerospace Industry Blueprint 2030.
“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 aero-engine components manufacturing is starting to pick up pace.” she said during the Singapore Airshow 2018, here, recently.
More than 50 Malaysian delegates participated in Malaysian Pavillion, hosted by the National Aerospace Industry Coordinating Office (Naico).
Talagavathi said the ministry was actively promoting worldclass aerospace parks, such as the Kuala Lumpur International Airport Aeropolis, Subang Aerotech Park, UMW High-Value Manufacturing Park Serendah and 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 Asia Pacific is expected to have the highest growth in new aircraft deliveries for the next decade,” she said.
In 20 years, original equipment manufacturers (OEMs), namely Airbus and Boeing, forecast significant new aircraft deliveries, particularly to Asia-Pacific countries.
Airbus forecast 35,000 deliveries, of which 41 per cent is for Asia Pacific. Boeing is targeting 41,000 new aircraft, of which 39 per cent is for Asia. There is also a huge demand for aviation services in Asia Pacific.
In total, 16,000 new aircraft are 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 the region.
To date, the industry has produced more than 200 companies and employed more than 21,000 skilled workers, and is anticipated to create 1,000 jobs this year.
Talagavathi said aerospace exports up to September last year 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 United States, the United Kingdom, Singapore, Japan and Thailand.
“The increase was not only bolstered by export growth in aerospace parts and components manufacturing, but also the maintenance, repair and overhaul (MRO) activities,” she said, adding that the MRO sector is expected to grow further, particularly for airframes, engines and components.
The sub-sector is expected to contribute RM6.7 billion to annual revenue this year. In 2016, MRO activities contributed RM5.7 billion revenue, she added.
Some of the major local companies are CTRM Aero Composite, which is the single-source supplier for manufacturing and supply of Airbus A350 fan cowl; and SME Aerospace, which offers a comprehensive metal fabrication, machining, treatments and assembly of aerospace parts and components for global OEMs and Tier-1 companies.
UMW Aerospace, which delivered six fan cases for the RollsRoyce’ Trent 1000 last year, has 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 the ministry, through its agencies, would continue to develop potential local small and medium enterprises (SMEs) to be part of the global aerospace supply chain.
“Another 10 local SMEs will be nurtured this year. We already developed 20 under the EntryPoint Project 8: Developing SMEs in the Global Aerospace Manufacturing Industry.
“It targets to increase the gross national income to RM454 million and create 4,100 job openings by 2020,” she said.
Malaysia Aerospace Industry Blueprint 2030 is targeted to capture five per cent of the global MRO market share. For manufacturing, Malaysia aims to be the number one producer of parts and components in Southeast Asia.
Naico head Shamsul Kamar Abu Samah said the target was to create more sophisticated entrepreneurs, not just traders.
“These entrepreneurs will offer higher value services and products to become the preferred outsourcing centre by the OEMs,” he said.
Shamsul said there would be more collaborations with other countries as firms would expand Malaysia’s capabilities and develop the ecosystem with better development programmes.
“We’re also exploring other areas besides aerostructures and engine components, such as cabin interiors and local solutions for global aviation players.
“We want to be 70 per cent selfreliant in system engineering and 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,” he added.