Phase 1 of AAC to be ready in mid-2015

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KUALA LUMPUR: The construction of Phase 1 of the RM2 billion Asia Aerospace City (AAC) in Subang, Selangor, which is being developed by Pelaburan Mara Bhd, is 60% complete and will be ready by the middle of next year, said Strand Aerospace Malaysia Sdn Bhd co-founder and chief operating officer Naguib Mohd Nor.

The first phase will house the second campus of Universiti Kuala Lumpur’s Malaysian Institute of Aviation Technology. Its first campus is located in Dengkil, Selangor. The development of the 20.23ha ACC is divided into three phases. Construction of Phase 2 will begin at end-2017 or mid-2018, while the final phase will be constructed a few years later.

Phase 2 of the AAC will feature a complete business ecosystem with facilities that include integrated offices, a knowledge centre, research and technology facilities and an academic campus. According to the building plan sighted by The Edge Financial Daily, the AAC will have two million sq ft of office space, with 13 blocks having nine floors of offices, a professional training centre and laboratories. Phase 3 of the AAC will consist of a convention centre, a hotel and residential buildings.

“The convention centre will be used for aerospace exhibitions, conferences and educational events. The third phase of the development will also have retail outlets, a three-star business hotel, waterfront dining, an outdoor recreational centre, health and fitness facilities,” Naguib told The Edge Financial Daily in an interview.

The AAC is owned by Majlis Amanah Rakyat (Mara) through its subsidiary Mara Aerospace & Technologies Sdn Bhd (Mara Aerotech), which in turn owns 30% of Strand Aerospace Malaysia. The project is expected to attract some US$1 trillion (RM3.26 trillion) worth of global aerospace engineering service businesses by 2020. In March this year, Pelaburan Mara appointed UK-based WS Atkins plc as a lead consultant and master planner to develop the AAC. Mara Aerotech will be responsible for generating AAC’s revenue via its six strategic business units — the business consulting centre, engineering services, professional development centre, research and technology, investment and infrastructure.

Aerospace Malaysia Innovation Centre chief executive officer Shamsul Kamar Abu Samah said last year that revenue from the domestic aerospace development industry reached RM9.5 billion, with maintenance, repair and overhaul (MRO) and manufacturing activities accounting for 55% and 33% of the total respectively. “Excluding aviation players, there are now 159 companies involved in the aerospace industry, with 19,200 jobs created. The investments committed so far total RM387 million, with exports of RM2.2 billion in 2012.”

On the local MRO business, Shamsul said current revenue of RM5.5 billion is below 5% of the global market share target for 2015, and recent investments by global aerospace companies such as Airbus and SR Technics will accelerate growth in the coming years.

“By 2020, the aerospace sector is expected to achieve a gross national income of RM13.4 billion and create 20,700 jobs,” he said.

Malaysia is due to announce its second National Aerospace Blueprint 2015-2030, which will set out the next focus areas to be developed in the next 10 to 20 years so as to remain competitive in the global supply chain. “Some of the key policies that form the basis for aerospace industry development include MRO, parts and components manufacturing, avionics and systems integration, education and training. The government is also providing incentives to aerospace players through blanket approval of tax exemptions on imports and components for MRO,” said Shamsul.

 

This article first appeared in The Edge Financial Daily, on October 23, 2014.