Friday 29 Mar 2024
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This article first appeared in The Edge Malaysia Weekly, on February 29 - March 6, 2016.

ASIA Aerospace City, set up in 2014, aims to be the catalyst to move Malaysia’s aerospace industry up the value chain, from focusing on the maintenance, repair and overhaul (MRO) space to design engineering and manufacturing of critical components.

The initiative started through a collaboration between Strand Aerospace Malaysia Sdn Bhd (SAM) — a subsidiary of UK-based Stress Analysis and Design Engineering Ltd (Strand) — and Majlis Amanah Rakyat (Mara).

“SAM was founded in 2006 when I got back from the UK, and I brought with me a bunch of design contracts from Strand. We did the design for the rear spar of the Airbus A380’s wings in Malaysia,” SAM CEO Naguib Mohd Nor ells The Edge at the recent Singapore Airshow 2016.

“Our engineers are basically consultants to the major aerospace companies, including Airbus and others in Europe, and Boeing in the US,” adds Naguib, who is also chief technical officer of Mara Aerospace & Technologies Sdn Bhd (Mara AeroTech).

SAM started with just eight people, but has since grown to a team of about 200.

Selected as one of the leaders to establish and strengthen Malaysia’s pure play engineering services industry under the government’s Economic Transformation Programme (ETP), SAM was given a global marketing and training grant to grow its business. The support enabled it to get contracts from Airbus SA in Germany, France and Spain. It has also got into other industries such as oil and gas, rail, construction and big data.

As a substantial shareholder, Mara — which turns out 20,000 engineering graduates a year — was tasked with coming up with a programme to bridge the human capital competency gap in the aerospace industry.

That requirement to develop engineering professionals with world-class expertise and knowledge became one of the pillars of Asia Aerospace City. Eventually, SAM, together with Mara AeroTech, developed the framework of Asia Aerospace City based on six pillars.

Asia Aerospace City is not just an industrial park for the aerospace industry. Rather, it offers a complete business ecosystem with human capital capabilities through centres for professional development and business consulting, engineering services, research and technology, investments and infrastructure.

These six pillars are needed for original equipment manufacturers (OEMs) to set up their base in the country, while promoting innovation and sustainable growth for the sector.

“So, by doing this, it is easier to sell Malaysia as an aerospace manufacturing centre because we have a product. The OEMs and international players are buying into this [Asia Aerospace City],” says Naguib.

In developing human capital capabilities, Asia Aerospace City will incorporate apprenticeship as part of the employees’ professional development through “training factories”.

“The idea behind these training factories is to now push towards apprenticeship. In Europe, the entry point for an apprenticeship is about 16 years old. From that point, you keep growing with the company.

“So, if you look at British Aerospace and Rolls Royce, roughly half of the board of directors started as apprentices. What you would have is people from the shop floors becoming managers. In advanced developed countries, this is how they grow,” says Naguib.

He adds that the current employment model in Malaysia, whereby an ample pool of low-cost labour work on the factory floors while degree holders become managers, will not take the industry very far as there is a disconnect between the employees’ technical and academic capabilities.

“What we are trying to do is look into moving diploma holders into apprenticeship. That feeds into the aerospace companies that then tailor make programmes on design engineering.

“So, when the students graduate and hit the shop floors, we know what they can do, and we can target about 50% to 60% readiness,” says Naguib.

On the business consulting centre pillar, SAM will help Malaysian companies negotiate contracts with OEMs. In fact, this pillar has borne fruit in the form of a contract win by UMW Aerospace Sdn Bhd last August.

UMW Aerospace signed a 25-year partnership with Rolls Royce, which culminated in it being awarded a contract to manufacture the Rolls Royce Trent 1000 engine’s fan casing.

According to Naguib, a fan casing is priced at US$700,000 to US$800,000. The fan casings will be delivered to Rolls Royce’s final assembly plant in Seletar Aerospace Park in Singapore, which has an annual capacity of 250 engines.

UMW Aerospace will be the single source globally for Rolls Royce’s Trent 1000 fan casing, says Naguib. The company was converted into a tier 1 supplier for Rolls Royce in less than a year — a big achievement for Malaysia’s aerospace industry.

The rapid development of UMW Aerospace was a result of collaboration between SAM, Mara AeroTech, UMW Holdings Bhd, the Malaysian Investment Development Authority and the Malaysian External Trade Development Corp.

UMW Aerospace will develop its 860-acre tract in Serendah into an aerospace park that will be co-branded as Asia Aerospace City, says Naguib. Besides that, KLIA Aeropolis will also be similarly co-branded.

Serendah Aerospace Park will be a hub for hard metal manufacturing, while KLIA Aeropolis will be used for MRO and soft metal manufacturing for the aerospace industry.

Hard metal manufacturing is basically the fabrication of parts using hard metal, such as titanium, used for parts such as engines and the landing gear of an aircraft. Meanwhile, soft metal is used for parts that use aluminium or carbon composites, for example.

Asia Aerospace City in Subang will be developed as a research and development centre of aerospace technologies and engineering services.

With the ball rolling via the Rolls Royce contract with UMW Aerospace, Naguib says Asia Aerospace City is getting traction with aerospace associations from France, the UK, Germany and the Netherlands. 

 

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