Overview

1. Malaysia’s aerospace industry has grown significantly and has provided more than 19,000 jobs opportunities - mostly in the MRO and manufacturing sectors with the active participation of our local small and medium-sized enterprises. Total number of companies in operation has reached more than 160.

2. The aerospace industry is a high-value industry in Malaysia’s diversified economy. The total revenue generated by this industry currently stood at RM11.8 billion.

3. By 2030, the industry is projected to contribute revenue of RM20.4 billion for Maintenance, Repair and Overhaul (MRO), RM21.2 billion for aero-manufacturing and RM13.6 billion for engineering and design services.

4. In 2015, four projects were approved with total investment worth RM5 billion – in which RM4.9 billion was from domestic investment while the remaining RM30.6 million came from foreign direct investment.

5. Meanwhile, our total trade for aerospace products in 2015 stood at RM14.2 billion. The exports of Malaysia’s aerospace products, recorded a significant increase of 44.7% from RM2.9 billion in 2014 to RM4.2 billion last year. The exports breakdown is as follows – composite parts and components (RM4.07 billion), aerospace communication system and parts, and avionics (RM86.8 million) and aircraft propellers and rotors (RM3.1 million)

6. At the same time, our imports had decreased by 33.5% from RM15.1 billion to RM10 billion within the same period. Our imports were made up of aircrafts (RM4.06 billion), parts of aircrafts (RM5.55 billion) and helicopters (RM410 million).

7. International Trade and Industry Minister Dato’ Sri Mustapa Mohamed said, “Despite the encouraging increase in exports, the amount of imports is still bigger than our export. We need to focus on building the production capacity of our local suppliers, which in turn would help boost our exports and close this trade gap,”

8. The growth of Malaysia’s aerospace industry is in tandem with the trends within the Southeast Asia region as a whole. For example, Singapore has recorded an average growth of 10% in its aerospace industry over the last two decades. Thailand is also developing an aerospace industrial estate, in which once its fully completed and operational, is expected to generate USD1.5 billion every year for the country.

9. “Against this backdrop, it is imperative that we continue to identify and develop key areas which could improve the dynamic and competitiveness of our aerospace industry in comparison to our regional peers”, Dato’ Sri Mustapa added.

Malaysia as part of the global aerospace industry supply chain

10. Currently, Malaysia is among the critical suppliers for aircraft structure components mainly for Airbus and Boeing. Last year, the Composite Technology Research Malaysia (CTRM) secured two long-term contracts from Spirit AeroSystems and UTC Aerospace Systems totalling RM10 billion.

11. Dato’ Sri Mustapa explained, “There are currently about 7,000 units of A320 aircraft flying around the globe, in which at least 5,000 of them are built with components produced in Malaysia. For instance, many may not know that 40% of the wing components are being produced in Melaka and assembled in Subang, which is testament to our firm footing within the global supply chain”.

12. Our involvement is also not limited to just producing to aero-structures, as we are now entering into aerospace engine components manufacturing through the on-going collaboration between UMW and Rolls-Royce. Under this collaboration, UMW Aerospace will enhance its capability to be the single source Tier 1 supplier for Rolls-Royce, specifically for its Trent 1000 and Trent 7000 aircraft engines. These commitments showed that Malaysia has what it takes to become the preferred partners to the Global industry leaders.

13. Another project initiated in 2015 that will benefit the local industry is the Airbus Tooling Supply Chain Programme for complex in service repair tooling, which has been outsourced to SDMK Sdn. Bhd., a new Malaysian tooling supply chain.  SDMK currently manufactures jigs for composite repair of aircraft rudders and elevators for the A320 and A330 aircraft manufactured by Airbus. Under this programme, SDMK also works with another local company, WZS Technologies Sdn. Bhd to produce the detailed parts and components; thus establishing the tooling supply chain for Airbus in the country.

14. "With this, a Malaysian company will, for the first time, build its capacity and competence in a new area and be part of the international tooling supply chain, laying the foundation for the establishment of an ecosystem for tooling development in the country," Dato Sri Mustapa noted.

The appointment of new Head of NAICO

15. Separately, after chairing the first meeting in 2016 of the Malaysia Aerospace Council (MAC), Dato’ Sri Mustapa announced the appointment of Mr. Shamsul Kamar Abu Samah, CEO of Aerospace Malaysia Innovation Centre (AMIC) as the Head of the National Aerospace Industry Coordinating Office (NAICO) starting from April 1.

16. "With 20-years of experience in the aerospace industry, Mr. Shamsul is knowledgeable about the industry, which is a vital component of our drive to make Malaysia a high-income nation by 2020. His leadership skills will be crucial in helping NAICO to implement the relevant initiatives drawn up by the Government and in working closely with industry players and other stakeholders to further develop the industry," Dato' Sri Mustapa said.

The launch of MAIA

17. Prior to the meeting, Dato’ Sri Mustapa has also launched the Malaysia Aerospace Industry Association (MAIA), a non-governmental organisation and functions to support and represent the voice of all Malaysian companies in the aerospace sector in our efforts to develop Malaysia’s status as the aerospace hub in Asia, particularly in ASEAN. MATRADE as the national export promotion agency will play a main role as the association’s lead facilitator.

18. Dato’ Sri Mustapa noted that, “The role played by MAIA will be crucial in delivering the industry insights to policy makers as we continue to chart the growth of Malaysia’s aerospace industry. This partnership will ensure that the Government’s policies are in line with the views of industry players,”

19. MAIA will be led by Mr Naguib Mohd Nor, CEO of Strand Aerospace Malaysia Sdn Bhd, as the association’s pro-tem president. The pro-tem committee of MAIA comprises top management of member companies who are entrusted to draw the guidelines for the group with an emphasis on capacity development and international market penetration.

Ministry of International Trade and Industry
28 March 2016