Malaysia’s MRO industry sets for 10% revenue growth
Malaysia, which is among the three
leading countries for MRO services in the Asia Pacific, after Singapore
and Hong Kong, particularly for engines and airframes, and modification
of airframes, is expected to see a 10% revenue growth in the industry
this year from some US$900 million (RM2.79 billion) last year, according
to global business consulting firm, Frost & Sullivan.
Speaking at the Asean Commercial
Aviation Conference held at the Langkawi International Maritime and
Aerospace Exhibition (Lima) 2013, Frost & Sullivan (Asia
Pacific) Director, Subhranshu Sekhar Das attributed Malaysia’s
competitive advantage in MRO to the country’s lower cost workforce.
As fuel and maintenance cost account for
some 50% of the operating cost of an airline and are difficult to
control, expenditure on MRO would continue to rise, he said, adding that
in the Asia Pacific, the demand for engine services posted an annual
growth of 8.5%, while services for airframes and airframe modification
recorded an increase of 5.5% and 6.6% a year respectively.
Frost & Sullivan Global Vice
-President Chris De Lavigne said the growth of airline passengers in the
Asia-Pacific region would also boost growth in the local MRO industry.
Meanwhile, Malaysian Investment
Development Authority (MIDA) Deputy Chief Executive Officer, Datuk Phang
Ah Tong said the local MRO industry had proven to be a reliable pillar
of support for the domestic economy.
Among the major MRO service companies in
Malaysia are Malaysia Aerospace Engineering (MAE), Airod (Aircraft
Inspection, Repair, & Overhaul Depot), Sepang Aviation Engineering,
GE Engine Services Malaysia, Eurocopter Malaysia , Honeywell Aerospace
Services, Hamilton Sundstrand Malaysia, Agusta Westland, Airfoil
Services, and AAR Landing Gear Services.
He said Malaysia is still attracting
investments in the aerospace industry, despite the external challenges,
as the aerospace products have a longer life cycle, unlike products in
the consumer electronics sector where the life cycle gets increasingly
shorter.
Meanwhile, Honeywell Aerospace (Asia
Pacific) President, Briand Greersaid the company would be putting a
business leader in Malaysia in the next quarter to handle aerospace
military and defence business in the Asia-Pacific region, noting the 6%
to 7% a year growth in the demand for aerospace military and defence
products in the region.
Greersaid said Malaysia’s strategic location enable the company to use it as a base to access the regional aerospace industry.
Honeywell Aerospace operates a
manufacturing plant on a 13-acre site in Seberang Prai, making control
display system for the cockpit of aircraft.
Recently, home-grown UPECA Aerotech Sdn
Bhd, which has been awarded a RM763 million contract from the US-based
UTC Aerospace System, will invest over RM30million over the next three
years and will increase its headcount to more than 100 at its Shah Alam
plant.
The contract covers all aspects of
manufacturing development, design and fabrication of all jigs and
fixtures, procurement of raw material, machining, testing, treatment and
assembly of the machined components.
Another local company, Jetline
International (M) Sdn Bhd, a jet aircraft component maker, will invest
RM1 billion in a manufacturing facility as the company expands its
operations following the acquisition of a RM1.1 billion US-based jet
manufacturing firm last year.
Adapted from StarBiz 1 April 2013 and MIDA
