by: naguib mohd nor president malaysian aerospace industry...

Copyright M-AeroTech

By: Naguib Mohd Nor

President – Malaysian Aerospace Industry Association

CTO - MARA Aerospace & Technologies

CEO/Owner - Strand Aerospace Malaysia


Update on Malaysia

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ASEAN – home to over 630 million people and a

thriving economy. It shows huge potential hailing from the

rising middle class in Malaysia, Indonesia,

Philippines, and Thailand.

The benefits of regional economic integration will far

exceeded its cost. For the aviation industry, the multiplier

effect is 13 fold. In other words, every $1 an airline spends

leads to a $13 increase in GDP. This will also fuel the

growth of job opportunities, as the aviation

industry heavily depends on a highly skilled

workforce for it to grow. Boeing estimates that

ASEAN will need 56,500 more pilots and 59,500

more aircraft technicians in the next two decades.

ASEAN citizens are the ultimate beneficiaries of the product

of regulations being liberated in ASEAN.

However, there are many things that still need to take place in

order for ASEAN to reap these benefits.

The Future is Asean


Malaysian Investment Development Authority (MIDA) deputy CEO II

Datuk Phang Ah Tong says because of that, many big boys in the

aerospace industry are looking to shift their centres to Asia to cut

cost and that presents opportunities for Malaysia, which sits

strategically on the map.

Because of that, local champions can provide aerospace parts

and services throughout the whole value chain.

“MIDA’s role is to identify the gaps in the aerospace industry and

advise our local champions to fill in the gaps in the whole value chain.”

The recent commodities rout which hit the oil and gas (O&G) industry

had led to players in the ecosystem getting hurt as the number of jobs

are slashed and the revenue pie is shrinking.

Phang says some of the machinery makers for the O&G sector

can transfer their know-how and diversify into the aerospace

industry by collaborating with existing aerospace players.

“This is an industry that’s full of potential. Moreover, the barrier of

entry is quite high so business owners have to make conscious

decisions and efforts so that they can get into this lucrative

business.”

“It was a vision for us to tap into other sources of income and

going forward, aerospace will be a promising area on top of what

we have already achieved for electric and electronics.”

2016 is seeing a confluence of

OEM needs for wider supply

chain and Malaysian companies

needing to diversify into Higher

Value businesses such as

Aerospace.

4

Latest News


ICF’s 2015 data shows that the Aerospace Manufacturing and MRO industries are both showing strong

positive trends despite the global economic challenges. The latest information shows some effects of

the challenges faced which has reduced ICF’s RPK growth predictions by 1% from previous.

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Aerospace Industry & Cluster Outlook Summary

AEROSPACE INDUSTRY & CLUSTER OUTLOOK:


Asia Aerospace City and Malaysia National Strategy

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EPP5

ENGINEERING

SERVICES

EPP1

MRO

EPP7

HUB FOR

OEMs

EPP8

SME

DEVELOPMENT

ECONOMIC TRANFORMATION PROGRAMMEAEROSPACE

BLUEPRINT

ETP and Aerospace Blueprint have the programs and initiatives that will

drive the industries development

Aerospace Industry as a key driver for RMK11 objectives:

1. Malaysia’s transformation into a high-income nation

2. Re-engineering economic growth for competitiveness

3. Harnessing talent

4. Environment and Resource Management

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PEMANDU ETP 2020 Target

EPP1 EPP5

Additional Revenue by 2020

RM 17.4 B RM 4.6 B

Additional Jobs by 2020

21,000 11,500

EPP7

RM 19.6 B

3,368

Asia Aerospace City anchors

many of the above EPP

targets. Projects such as the

Subang ES centre for EPP5

are already within the

Aeropolis.

ETP & Blueprint Goals


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Copyright M-AeroTech M-AeroTech© MARA Aerospace & Technologies Sdn Bhd 9

STRATEGIC PARTNERS


“ The much-coveted aerospace

technology could catapult Malaysia into

the big league of high-tech hubs.

Malaysia's strategic location, with its

modern infrastructure make the country

an enabler in Asia's aerospace sector. ”

Datuk Azman Mahmud

CEO, MIDA

25 Jan 2016, Bernama

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Recent Developments in Malaysia Aerospace Industry

Airbus Customer

Services

Malaysia Sdn.

Bhd started

operations.

Jet engine fan

casing

manufacturing

contract

awarded by

Rolls Royce to

UMW.

French

Aerospace

Industry

Association

(GIFAS) opening

a regional office

in Kuala Lumpur.

Tooling Supply

Chain handover

project between

a major OEM

and a local

tooling

manufacturer.

Expansion of

Spirit

Aerosystems

Malaysia and

CTRM.

ROLLS ROYCE /

UMWAIRBUS GIFAS AIRBUS / SDMK SPIRIT / CTRM

MAHB

Aeropolis:

Runway to

Success 2020

Development

MAHB

AEROPOLIS

Feb

2014

Aug

2015

Nov

2015Feb

2016

In

progress

In

progress


Constant stream of enquiries

Regular UK aero

companies trade

events in Malaysia

Regular annual events connecting potential

players for business opportunities

exploration

Regular French aero companies

trade events in Malaysia

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European Companies Searching for Opportunities in Malaysia

AEROSPACE INDUSTRY & CLUSTER OUTLOOK:


18768

9625

52734925

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

France Singapore Mexico Malaysia

Mo

nth

ly S

alar

y (R

M)

Country

Average Aerospace Technology Manufacturing Monthly Salary Comparison

• Malaysia is 7% cheaper than Mexico on average

• Aerospace Technology Manufacturing includes Salaries from Engineers, and

Technicians.

Source: Payscale Inc, Seattle, Washington, U.S.A

Currency Conversions Used

(1/2/2016)

Currency

Value of single

currency unit

(RM)

Euro (EUR) 4.51

Singapore

Dollar (SGD)2.92

Mexican Peso

(MXN)0.23

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Malaysia competitive in labor costs


Contract Manufacturer

High Value Manufacturer

Contract

Manufa

cturin

g –

com

pete o

n

price

Mass

Producti

on

Complia

nce

Testing

Operatio

nal

Capacity

Producti

on /

Ware

housing

Proce

ss

Developm

ent &

Impro

vem

ent

Concess

ions

and Repair

R&T on

Mate

rials,

Proce

sses,

meth

ods etc

Mate

rial R

eview

& Impro

vem

ent

Autom

ation

Toolin

g

Technology

Engineering

Solution

Provid

er

Value-Adding

Product

Developm

ent Pra

cticin

g Lean

Manufa

cturin

g

Develop a

nd

Roll Out L

ean

proce

sses

Proto

type &

Complex T

ooling

fabric

ation

Proce

ss

valid

ation

Simple Toolin

g

fabric

ation

Value Stre

am

Mapping

Cost Down /

Value

Engineering

Contract

Manufa

cturin

g –

com

pete o

n

price

Mass

Producti

on

Complia

nce

Testing

Operatio

nal

Capacity

Producti

on /

Ware

housing

Proce

ss

Developm

ent &

Impro

vem

ent

Concess

ions

and Repair

R&T on

Mate

rials,

Proce

sses,

meth

ods etc

Mate

rial R

eview

& Impro

vem

ent

Autom

ation

Toolin

g

Technology

Engineering

Solution

Provid

er

Value-Adding

Product

Developm

ent Pra

cticin

g Lean

Manufa

cturin

g

Develop a

nd

Roll Out L

ean

proce

sses

Proto

type &

Complex T

ooling

fabric

ation

Proce

ss

valid

ation

Simple Toolin

g

fabric

ation

Value Stre

am

Mapping

Cost Down /

Value

Engineering

Transforming Malaysian Manufacturing


Aerospace Clusters in Malaysia

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TIER 1s

TIER 2s

TIER 3s

TIER 4s

TIER 5s

OEMsHELICOPTERS

HELICOPTERS

Operators

MRO,

Servicing

Education,

Training,

Simulation

Logistic

Test and

Evaluation

Engineering

And Design

MULTI

-TIER

15

Aerospace Supply Chain in Malaysia

CURRENT STATUS OF SEPANG AND SUBANG ECOSYSTEMS:


16

Aerospace Cluster in Selangor StateCURRENT STATUS OF SEPANG AND SUBANG ECOSYSTEMS:

Ecosystems Selangor Total

MRO, Servicing 47

Standard Part Supplier, Trading 32

Others 27

Manufacturing 25

Operator 18

Education, Training, Simulation 15

Engineering, Design 12

Jigs, Tool Supplier 11

Logistics 9

Representative 5

Special Processing Shop 4

Assembly, Integrator 3

Test and Evaluation 2

Total 194


UMW Aerospace Park

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11/27/14 BusinessConsul ngCenter 8

UMWYesterday,TodayandIntotheFuture………

Aerospace)Manufacturing)

Bicycles)

Automo5ve)Manufacturing)

ü Strongleanmanufacturingü Strongrecordofdeliveryand

performance

ü Largeautomo vemanufacturingcapacitytoleverageon:

ü HumanCapital

ü LandandSupplyChain

Copyright M-AeroTech M-AerotechCopyright M-Aerotech

A330NewEngineOp on

Boeing787Dreamliner

Trent7000

Trent1000

SingleSourceFinalAssemblyofEn reEngines

PrecisionAeroHardMetalMachiningManufacturingandAssemblyPark

(exampleparkconceptshown-Tunisia)

THE OEM REQUIREMENT


Manufacturing this in Malaysia represents the following milestones for the country:

•UMW will be manufacturing Titanium Engine Fan Casing for Trent 1000 engines

•Through this UMW becomes Rolls Royce Tier 1 engine manufacturing company Malaysia

•UMW is targeting becoming a specialist in complex titanium and other hard metal manufacturing capability and also have new robotic welding capability

•Strategically this gives UMW the ability to develop an aero engine supply chain around the fan casing

UMW’s ENTRY INTO THE AEROSPACE INDUSTRY AS A TIER 1


DEVELOPING OEM CLUSTERS

Fan Casing Factory

Supplier 7

Supplier 6

Supplier 5

Supplier 1

Supplier 2

Supplier 3

Supplier 4

Supplier 8 UMW Auto Diversification SME Program

EPP8 Aero SME Growth Program

Strong National Branding and Comprehensive Industry Support Solution

UMW Aerospace Hard Metal Manuf. Park

Foreign SME’s Entering Into Malaysia


UASB Partnership is geared towards the following areas:• Hard Metal Machining - engine components, landing gear components, brakes etc.• Manufacture and supply aerospace components supporting UMW Aerospace (UMWA) Rolls

Royce Fan Case Manufacturing.

Figure below describes the proposed partnership model between UMWA and the partner.

UMW Advantech (UASB) – Searching for Partner!

PARTNER

+Partner will provide:

i) Capabilitiesii) Contractsiii) Certifications

UASB will provide:

i) Fundingii) Infrastructureiii) Manpoweriv) Training (Facilitate)

Proposed Partnership Model

UASB is the next UMW Subsidiary to Diversity into Aerospace. Currently it is an auto components manufacturer. In order to enter into the aerospace market as a hard metal machining company UASB seeks partnership with an established company.


LOW-DENSITY

RESIDENTIAL

COMMUNITY

COMMERCIAL CORE WITH

INTEGRATED CONNECTION

TO LANDSCAPE

MIXED-USE &

RESIDENTIAL LOOP ROAD

HIGH-END, LOW-DENSITY

RESIDENTIAL COMMUNITY

AEROSPACE

INDUSTRY

CLUSTER

FAN CASING FACTORY

MEDIUM-DENSITY AFFORDABLE

HOUSING COMMUNITY

PRE-

PRODUCTION

FACILITY

Serendah Aerospace & Technology Park

460 Acres Of Aerospace

Park ~ 40 factories


• Training Factory – Malaysia’s first Aerospace Manufacturing Training Centre

• Developed in partnership with RR

Asia Aerospace City – Serendah Manufacturing Apprenticeship


Malaysia Airports Bhd - Aeropolis

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Integrated cargo network to stimulate

high value cargo trade

Aviation intensive businesses (eg.

Aero-manufacturing, OEM, MRO,

FBO)

Development of retail and commercial

activities to make an attractive

destination

MAHB Aeropolis Focus ClusterRtS2020: Expand & Diversify - Aeropolis

Help Malaysia become a leading

aviation business hub in the region

• Regional hub for private jet aircraft

services

• MRO and OEMs for helicopters

• Hub for aero-manufacturing services

• High-end MRO facilities

SUBANG AEROSPACE

KLIAAEROSPACE

26

MAHB Aeropolis (Aerospace Belt)


27

SUBANG

MASTERPLAN

KLIA

MASTERPLAN

Plot J

Plot B, O, R

PT 2

SSZ

MAHB Aeropolis (Aerospace Belt)

1054 Acres Of

Aerospace Park ~ 100

factories/component

repair centres


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Asia Aerospace City – Subang ES CentreENGINEERING SERVICES AND AEROSPACE TRAINING CENTRE - A REGIONAL DIFFERENTIATOR:

Asia Aerospace

City (AAC) Subang

Nexus: Hub for

Engineering

Services anchoring

EPP5

Manufacturing/MRO Component

Repair/Business Park

MRO

UniKL MIAT: To

Produce 400

aircraft

technicians/year

and Degree

Holders

AMIC relocation into

Subang, completing

the ecosystem with

R&T capabilities

Centre for MRO

related to rotary,

propeller aircrafts,

GA, driving EPP1

Manufacturing

Education & Training

R&T

Eng. Services

Tier 1 manufacturer

to OEM, part of

EPP7


Asia Aerospace City’s

Professional Development

Centre has been running high

value Human Capital

Development programs in

partnership with the above

OEM’s for several years now in

the UK.

These programs are currently

being localized to the Subang

Nexus.

The aim of these programs is to

produce tailor made Human

Capital to Industry Specification.

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Professional Development CentreENGINEERING SERVICES AND AEROSPACE TRAINING CENTRE - A REGIONAL DIFFERENTIATOR:

by: naguib mohd nor president malaysian aerospace industry...

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