UMW SEES UPTICK IN FAN CASE OUTPUT NEXT YEAR
Demand for air travel projected to rise steadily with reopening of borders
UMW Holdings Bhd’s subsidiary, UMW Corp Sdn Bhd, is expecting an uptick in fan case production next year. UMW Corp president of aerospace Datuk Abdul Rashid Musa said the optimism is in line with the projected recovery in the global aviation sector.
“Our total production declined by about 20 per cent last year compared with 2019 due to lower demand. However, our business remained profitable,” he told the New Straits Times.
Rashid said this was made possible by its focus on cost optimisation.
“We had ramped up production in 2018 and registered our maiden profit in 2019.”
He said the rollout of Covid-19 vaccines globally will bring “cheer” to the airline industry as demand for air travel is projected to rise steadily with the reopening of international borders.
“Some countries have facilitated travel bubbles. The demand will also be supported by the growth in the global economy and the pent-up demand for travel after more than a year of travel restriction.”
Rashid expects the full recovery of the aerospace industry to begin next year, in line with the forecasts of leading industry players.
UMW Corp is the Tier-One supplier for Rolls-Royce Plc, with a contract to manufacture and assemble fan cases for the latter’s Trent 1000 and Trent 7000 engines.
UMW Corp had invested RM750 million to establish an aerospace component manufacturing plant at its UMW High Value Manufacturing Park in Serendah.
Rashid said UMW Corp delivered the first fan case for the Trent 1000 (Boeing 787 Dreamliner) and Trent 7000 (Airbus A330neo) engines in November 2017 and September last year, respectively.
He said UMW Corp’s operations have not been deterred by the Covid-19 pandemic in terms of sourcing for raw materials to produce the fan cases.
“The aerospace industry’s global supply chain continues to operate efficiently as it is considered an essential service. Our main challenge is to readjust our inventory level to match the lower production volume as some critical parts require very long lead time, up to 52 weeks.”
Rashid said the aerospace industry will reset its supply chain to remain competitive.
“We receive inquiries to supply other components to the aerospace industry that is within our capabilities. The Covid-19 pandemic has had a severe impact on the aviation industry.”
Citing an example, he said the impact is more immediate (“Vpattern”) for airlines and the maintenance repair and overhaul segment.
The impact on the manufacturing site is a “U-pattern” over the backlog of orders.
However, he is unable to disclose the production or delivery quantum due to a non-disclosure agreement with Rolls-Royce.
“We have no issues with delivering the fan cases as they are transported from our plant in Serendah to Rolls-Royce’s facility in Seletar, Singapore by road.”
Rashid said the unprecedented challenges brought about by the Covid-19 pandemic have affected original equipment manufacturers.
“This led to the cancellation of orders and delayed delivery of aircraft. This, in turn, triggered rationalisation of production capacity.”
He said there will be a shortterm term impact in anticipation of a lower production volume.
Nevertheless, he said there is no replacement for air travel.
“Air travel is still arguably the fastest and safest way to travel. We expect the industry to rebound soon.”
Rashid said the outlook and potential are huge in the long term as UMW Corp is a Tier-One supplier for Rolls-Royce.
“We will enhance our capabilities to venture into other advanced areas such as chemical milling and additive manufacturing. Our strategy is to embrace advanced technology and highvalue manufacturing, and at the same time be cost-efficient.”