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Monday, 3 April 2017

Tier-one aerospace firm to invest in Malaysia

LANGKAWI: A tier-one aerospace manufacturer is coming to invest in Malaysia, making it the first tier-one aerospace manufacturer to come to the country after a hiatus of 10 years.

This would spur the creation of high-income jobs in the country.

An International Trade and Industry Ministry (Miti) source said at the 14th Langkawi International Maritime and Aerospace Exhibition 2017 (Lima 2017) that negotiations were now on-going and should conclude by the end of of this year.

“The investment should benefit three to four small and medium enterprises (SMEs) in the country, create more high-value jobs, and contribute to realising the Aerospace Industry Blueprint 2015-2030 road map, launched in 2015,” the source said.

The tier-one Spirit AeroSystems, which is based in Wichita, Kansas, was the last aerospace manufacturing giant that invested in Malaysia in 2007.

The Miti source said this move would likely trigger another wave of tier-one manufacturing investments into the country to tap on the growing aerospace business in Malaysia over the next decade as projected by the blueprint.

“After Singapore, we are one of the strongest competitors in this region for aerospace investments.

“The other competitors are Indonesia and Thailand,” he said.

The tier-one aerospace manufacturer with plans to invest here is believed to be from the US.

Since the ascendancy of Donald Trump as the president of United States, there have been concerns whether US investments would flow back home.

In an exclusive interview with StarBiz recently, US ambassador Kamala Shirin Lakhdhir said that US companies in Malaysia made independent decisions based on the business environment and needs of the supply chain.

“US companies here produced for the global market and therefore make decisions according to the commercial environment.

“They have been here for decades and are still around because the Malaysian government has been very supportive in facilitating their investments.

“This why companies such as First Solar is committed to expanding in Malaysia,” she said.

She said the feedback received from the US companies so far had been positive. “The US investments here will either be maintained or grow further,” she added.

Fresh aerospace business opportunities are in the area of high-precision component manufacturing, with abundant opportunities for the transfer of advanced technologies in engineering, electronics, composite materials, system integration, maintenance, repair, overhaul (MRO) and industry-led research and technology.

“Since the implementation of the blueprint, SME Corp has nurtured 10 small and enterprises (SMEs) to produce aerospace parts and components.

“Another 10 are currently being identified to strengthen the aerospace manufacturing eco-system of the country.

“As business opportunities in the oil and gas industry are still limited due to the economic slowdown, we can expect more local SMEs with the machinery and capabilities to perform high-precision component manufacturing to diversify into the aerospace sector,” the source said.

Local SMEs with the machinery and high-precision manufacturing capabilities can obtain international certifications from regulatory bodies such as The Civil Aviation Authority, the Federal Aviation Administration and the European Aviation Safety Agency to play a role in the aerospace manufacturing eco-system.

According to the blueprint, launched during Lima 2015, the local aerospace industry is expected to generate a RM55.2bil revenue and 32,000 high-income jobs by 2030.

“The goals of the blueprint are very achievable because of the projection for future orders by Boeing and AirBus,” the source said

Boeing has forecast a need for over 39,600 airplanes valued at more than US$5.9 trillion over the next 20 years.

In its “About our Market: Current Market Outlook 2016-2035” report, Boeing said 38% or about 15,000 of the new airplanes would be delivered to Asia.

Airbus projects a need for 33,070 new passenger aircraft – valued at US$ 5.2 trillion – over the next 20 years, based on its latest Global Market Forecast (GMF): Mapping Demand report.

Meanwhile, Miti Minister Datuk Seri Mustapa Mohamed said the aerospace industry in the country was expected to grow at 7% in 2017, with the aerospace manufacturing sector contributing 55% to the aerospace industry revenue.

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