Embraer mulls China factory to make comm’l passenger jets

Embraer SA is likely to consider building a commercial-aircraft factory in China in two years, Chief Executive Officer Paulo Cesar de Souza e Silva said, marking a potential shift in strategy after the company shut down its private-jet plant in the Asian country in 2016.

The Brazilian planemaker will wait for the rollout of its first E195-E2 aircraft in 2019 before it starts deliberating on the China plan, Silva said in an interview Friday in Singapore. The plant would be the company’s first overseas factory for passenger planes.

“We may consider it if we have the right partner and enough interest for our jets,” he said. “We see potential for a little bit over 1,000 aircraft of the size that Embraer manufacturers for the next 20 years in China. We have 80 percent of that market.”

Embraer, which spent last year battling a corruption scandal and falling private-jet deliveries, is looking to an aviation market that is expected to surpass the US as the world’s biggest in less than a decade. In the market for commercial planes, Embraer will face stiff competition from the smallest single-aisle jets made by Boeing Co. and Airbus SE, as well as a locallybuilt regional jet ARJ21 from state owned Commercial Aircraft Corp of China Ltd.

In providing its 20-year demand forecasts, Boeing said this week that China will need 7,240 planes valued at almost $1.1 trillion. Seventy-five percent of that will be for narrow-body aircraft as full-service and discount carriers expand routes for both leisure and business travel.

Embraer is pitching lower operating costs with its E195-E2, saying the plane – with 132 seats in a single-class configuration – will have demand in China and Southeast Asia. (Bloomberg)