The growth will be supported by the increase of activities in manufacturing of aerostructure and engine parts, and aero engines and components MRO
By AFIQ AZIZ / Pic By MUHD AMIN NAHARUL
THE aerospace industry’s revenue is expected to grow by another 10% to 15% this year from last year’s total earnings of RM14.4 billion.
Ministry of International Trade and Industry (MITI) Minister Datuk Darell Leiking said the target is achievable particularly via the manufacturing segment, despite the challenging overall global market.
“The growth will be supported by the increase of activities in manufacturing of aerostructure and engine parts, as well as the maintenance, repair and overhaul (MRO) of aero engines and components.
“Major original equipment manufacturers in the aerospace industry are expected to continue sourcing their aircraft parts and components in Malaysia,” he said at the Malaysia Aerospace Summit 2019 (MyAero’19) in Kuala Lumpur yesterday.
Darell said while plans are underway to push the business further, the industry players also need to be more exposed to the outside world and to secure more contracts no matter how small they are.
“Despite the challenges, distant companies (from the western countries that make aircraft) like Airbus SE and Boeing Co, still come to Malaysia to source out their parts and components because they could see our continuous efforts in supporting this industry,” he said.
Since the implementation of the key initiatives of the Malaysian Aerospace Industry Blueprint 2030 led by MITI’s National Aerospace Industry Coordinating Office (NAICO), the aerospace sector has reported a steady growth.
The industry now employs 24,500 highly-skilled workers. According to the blueprint, there will be 32,000 high-income jobs in the aerospace market, generating some RM55.2 billion revenue by 2030.
Darell said the aerospace manufacturing subsector is expected to maintain its leadership with a forecast growth of 15% in exports to RM9.75 billion this year.
Among the locally-manufactured aerospace products for export include fan cowl, fan casing, thrust reverser, forward leading edge, aircraft doors, avionics equipment and carbon brakes.
The subsector contributed RM6.97 billion or 48% of Malaysia’s total aerospace industry revenue last year, while MRO segment makes 46% of the overall contribution, generating RM6.68 billion.
In total, the industry generated RM14.4 billion in 2018, up 6.7% from RM13.5 billion compared to the year before, with 11 aerospace projects worth RM816.3 million approved last year, 41% of which came from overseas.
Darell said MyAero’19 platform is also expected to address talent gaps in the aerospace industry, which is still the main challenge for the fast-growing sector.
He said the NAICO, the Ministry of Human Resources and Department of Skills Development are expected to conduct a study on aerospace’s Technical and Vocational Education and Training supply and demand.
The result of the study will determine specific skills development programmes that are urgently required by the industry.
“We indeed need more talented and skilled workers. Among the efforts is to upgrade the relevant courses (from diploma to degree) in universities and ensure graduates are market-ready,” Darell said.
Apart from traditional market segments, he said Malaysia is also exploring opportunities in the New Space Economy or Space 4.0 — where space technology will enhance the quality of life in the country.
“There will be some activities with regards to space technology that we aim to develop in Langkawi.
“It includes a mission control centre, spaceport and high altitude lighter than air office that is similar to a Zeppelin balloon, which is expected to be used for 4G or 5G telecommunications and so on,” he added.
Darell said the Space 4.0 element the ministry wants to embark on, will be managed based on an investment ecosystem development, human capital and export.
“We expect some RM2 billion worth of new projects to be initiated over the next five years, excluding projects that have been approved by Malaysian Investment Development Authority. However, discussions and negotiations are still ongoing,” he said.