Page 14 - Malaysia Aerospace IR (Jan 2020).INTERACTIVE

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Aerospace Industry

Performance

The Government has identified aerospace industry as a strategic industry with great potential for Malaysia’s
industrialisation and technological development programmes. The importance of the industry is reflected
in the Eleventh Malaysia Plan (11MP) in which aerospace is deemed one of the key strategic focus sectors.
Post-2020, the Government will implement more robust action plans under the Twelfth Malaysia Plan
(2021-2025) to further advance the domestic aerospace industry.

The industry has seen steady growth in revenue and exports since the implementation of the key initiatives
of the Malaysian Aerospace Industry Blueprint 2030. The implementer for these initiatives is the National
Aerospace Industry Coordinating Office (NAICO) under the Ministry of International Trade and Industry.
The Blueprint - launched in 2015 - to advance Malaysia’s aspiration to be a leader in the industry by 2030
targets to generate RM55.2 billion in revenue annually and create 32,000 jobs in the aerospace sub-sectors.
NAICO, in partnership with other agencies such as Malaysian Investment Development Authority (MIDA),
Malaysia External Trade Development Corporation (MATRADE), SME Corporation Malaysia, Aerospace
Malaysia Innovation Centre (AMIC) and Department of Skills Development (DSD), has implemented
multiple aerospace development initiatives spanning industry facilitation, local supply chain development,
competency development, research & technology (R&T), international collaboration and human capital
development.

Quality investments combined with strong market demand have accelerated the development of the
local aerospace supply chain thus making Malaysia one of the critical suppliers for aircraft structure
components, particularly for Airbus and Boeing. In 2019, seven aerospace projects valued at RM2.07 billion
were approved, of which RM226.57 million or 11% was foreign and RM1.85 billion or 89% was domestic. The
projects are expected to generate 582 jobs.

The aerospace industry generated RM16.2 billion in revenue and employed more than 27,500 high-skilled
workers in 2019. The maintenance, repair and overhaul (MRO) services made up 49% of market activities
while aerospace manufacturing accounted for 47%. Globally, Malaysia has acquired a reputation for
producing quality products for global aerospace leaders such as Airbus, Boeing, Rolls-Royce, Safran,
Honeywell and Thales.

Malaysia has also become an important source for composite and metallic components for original
equipment manufacturers led by local champions like Composites Technology Research Malaysia Sdn.
Bhd. (CTRM), SME Aerospace Sdn. Bhd. (SMEA) and UMW Aerospace Sdn. Bhd.. Aeronautical parts and
components produced in Malaysia include A400M vertical & horizontal tailplanes, A320 spoiler panels &
leading edge panels, A350 nose & fan cowls, B787 fixed leading edge & fan cowls and Trent 1000 & Trent
7000 fan cases. In 2019, the exports of aircrafts and associated equipment & parts increased by 4% year-
on-year to RM8.81 billion. The main export destinations were the United States of America, Singapore, the
United Kingdom, China and France.

A stronger local supply chain is increasingly crucial in order to reinforce Malaysia’s position in the global
aerospace industry. Towards this end, NAICO and MIDA have conducted various supply chain conferences
involving OEMs and Tier 1 companies such as Embraer, Universal Alloy Corporation and Russian Aerospace