Aerospace exports to grow 5% annually

By LYDIA NATHAN / Pic By ISMAIL CHE RUS

Exports of aerospace manufactured products are expected to increase at a steady 5% annually for the next three years, on demand from original equipment manufacturers (OEMs) like Airbus SE and Boeing Co.

Exports of aerospace products rose 32.6% year-on-year (YoY) in 2016 to RM5.53 billion compared to RM4.17 billion in 2015, while imports stood at RM11.9 billion.

“Malaysia is now an important aero structure supplier, and has become an important source for composite and metallic components led by the local companies — namely Composites Technology Research Malaysia Sdn Bhd (CTRM) and SME Aerospace Sdn Bhd (SMEA),” Minister of International Trade and Industry (MITI) Datuk Seri Mustapa Mohamed said at the Malaysia Aerospace Summit in Kuala Lumpur yesterday.

Aerospace

Mustapa (left) says Malaysia will strive to accelerate the development of this industry (Pic by Ismail Che Rus/TMR)

Exports of the first six months amounted to RM3.5 billion and consist of parts like wing parts and engine casings produced by companies such as CTRM, UMW Holdings Bhd and UTC Aerospace Systems.

Most of the imports were aircraft and parts from the US, France, Singapore, the UK and the Netherlands.

A National Aerospace Industry Coordinating Office (NAICO) official said the lower growth in exports is partly because new investments into the country will take some time to commission.

The Malaysian Investment Development Authority is targeting investments of RM1 billion this year, compared to RM1.6 billion approved investments in 2016.

The investment targeted will also generate 800 new employment opportunities.

Meanwhile, the local industry is focused on manufacturing, as well as maintenance, repair and overhaul (MRO) activities.

CTRM is a major supplier of Airbus A350’s fan cowl, while SMEA offers comprehensive metal fabrication, machining, treatment and assembly of aerospace parts.

The MRO sub-sector grew 2% YoY to RM5.7 billion last year.

NAICO head Shamsul Kamar Abu Samah said there has been positive growth in aerospace manufacturing since 2007 with a revenue of RM6.4 billion in 2016, up 11% over 2015.

Revenue for the overall industry grew from RM900 million in 1998 to RM12.7 billion in 2016.

The country has positioned itself as an important suppliers to global OEMs such as Airbus, Boeing and Rolls-Royce Motor Cars Ltd.

Mustapa said Malaysia will strive to accelerate the development of this industry, and reduce imports by attracting Tier-1 and Tier-2 aerospace companies and nurture local companies to become vendors and suppliers to multinational companies (MNCs).

In line with Malaysia’s Aerospace Industry Blueprint 2030, MITI will implement initiatives and strategies to position the country as the number one aerospace nation in Asean.

MITI will also promote the implementation of Industry 4.0 in the aerospace industry through the Aerospace Malaysia Innovation Centre — where development on smart robotics manufacturing, online automation system and virtual reality training will take place.

Industry MNCs with operations in Malaysia include the Netherlands’ Airbus Group, US-based Spirit AeroSystems Inc and Singapore Aerospace Manufacturing Pte Ltd.