SAM plans to begin ops by next year
Component maker to start commercial production of nacelle beams for Airbus
SAM Engineering & Equipment (M) Bhd (SAMEE) will commence commercial production of nacelle beams for the Airbus A320neo aircraft at the new RM100mil production facility in Bukit Minyak in early 2018.
Group chief executive officer Jeffery Goh Wee Keng tells StarBizWeek that the nacelle beams are now undergoing prototype qualification by the customer.
“We are producing in Bukit Minyak half of the nacelle beams for the Pratt & Whitney engine used in the new Airbus A320neo aircraft,” he says.
Besides this current project, SAMEE has secured projects for Boeing 787, Airbus A350XWB, Airbus320neo, and Boeing 737max.
“We started delivery of various components for Boeing 787 and Airbus A350XWB.
“For Airbus 320neo, we have started delivery of the casings, while delivery for Boeing 737max has not started yet,” he adds.
Goh says the Bukit Minyak production facility will eventually be equipped with nine machines.
“It has four up and running now, while the remaining are being installed. The plant should be fully equipped by the second half of 2018,” he says.
Goh said the group was now studying to invest more for the facilities in Bayan Lepas and Bukit Minyak.
“The aerospace segment of the group would likely receive a higher allocation,” he adds.
For the 2017 financial year ended March 31, Samee invested RM82.8mil for the group operations, of which RM78mil was spent for the aerospace business.
Presently, the aerospace generates 58% of the group’s revenue for the 2017 financial year.
“Next year, when the new plant ramps up production, we can see the contribution from aerospace moving up,” he adds.
The group has recently projected that its revenue from the aerospace industry would account for about 60% of its 2018 revenue, which should remain stable.
On the slowdown in orders for Airbus380, Goh says SAMEE makes only casing for the aircraft.
“The impact is minimal as the orders for the new projects are picking up.
“Currently, the orders for AirbusA380 are at low production rates,” Goh adds.
On the equipment business, Goh says the group had enlarged its presence in the front-end semiconductor sector, reducing the contribution from the hard disk drive test equipment.
“We are now doing more work on making components for equipment used in front-end semiconductor manufacturing,” he added.
On the group’s first quarter for the 2018 financial year ended June 30 2017, SAMEE posted RM13.2mil in profit before tax (PBT) on the back of a RM133.4mil revenue, compared to RM10.8mil and RM127mil achieved in the previous year corresponding period,” he adds.
SAMEE’s revenue for the first quarter was lower at RM133.4mil as compared to RM156.2mil in the fourth quarter of the 2017 financial year.
“The decrease to the contraction in revenue from the aerospace and equipment manufacturing segments by RM12.8mil and RM10.0mil respectively as a result of lower demand from customers during the quarter.
“The group’s PBT for the first quarter of 2018 financial year ended 30 June 2017 was RM13.2mil compared with RM21.4 mil in the preceding quarter, due also to the lower profit contribution from the aerospace and equipment segments as a result of lower revenue.
Equipment business
“We expect the revenue from the aerospace industry which accounts for about 62% of our group revenue to remain stable.
“We expect revenue from the equipment business to be maintained for the next two quarters on the back of improving semiconductor industry except for the personal computer segment,” Goh says.
According to Boeing’s Current Market Outlook 2017-2036 report, the demand in the commercial market is forecast to more than double over the next two decades.
“To meet this demand, we forecast the number of jet airplanes will nearly double to almost 47,000, at an average annual growth rate of 3.3%. To support this fleet growth, Boeing forecasts a need for more than 41,000 new deliveries, valued at over US$6 trillion, for growth and replacement over the next 20 years,” the report adds.
On Asia, the report says that the Asian gross domestic product and passenger traffic will drive an estimated need for 16,050 new airplanes valued at US$2.5 trillion.
“The low-cost carrier market, for example, is helping grow the need for 11,840 new single-aisle airplanes, with the majority in the 737 MAX 8 seat-size category,”the report says.
On South-East Asia, Boeing forecasts that in the next 20 years, the region will need 4,210 new airplanes, valued at US$645bil.
“Growing nearly double digits in almost every country in the region in the last decade, passenger traffic is projected to accelerate at 6.2% in the next 20 years, outpacing the world’s average growth rate by 1.5%,” the report adds.
According to Boeing, single-aisle airplanes command the largest share of new deliveries at more than 70%, with airlines needing more than 29,500 over the next 20 years.
“By 2036, approximately 40% of all new airplanes will be delivered to airlines based in the Asia region.
“An additional 40% will be delivered to airlines in Europe and North America combined, with the remaining 20% delivered to the Middle East, Latin America, Commonwealth of Independent States, and Africa,” the report says.