THE aerospace manufacturing sector is one of the fastest growing sectors in Malaysia. Last year, it recorded more than RM2.5 billion of turnover and employed approximately 5,100 thousand workers.

The positive growth is fuelled by quality foreign direct investment in the aero-structure, avionics and engine components manufacturing -- from, for example, Honeywell Aerospace Avionics and Singapore Aerospace Manufacturing Group.

In the early years of aerospace manufacturing activities, Malaysia embarked into the manufacturing of light aircraft led by CTRM Aviation and SME Aviation. These activities did not position Malaysia as one of the global producers of light aircraft but led the country into the global supply chain for commercial aircraft.

Local players such as CTRM Aero Composites and Asian Composites Manufacturing (a Boeing Hexcel Company) are now recognised as critical aerospace parts and components suppliers in this region.

The Malaysian Aerospace Council chaired by the prime minister decided in 2001 that Malaysia is to focus on parts and components manufacturing for both composites and metallic. It outlined four strategies -- securing more contract manufacturing work packages, enhancing local supply chain, acquiring new technology and participation in international aerospace programmes.

The rationalisation of this sector has successfully positioned Malaysian companies at Tier 2 of the Global Supply Chain, of which Airbus and Boeing are the ultimate customers.

The recent investment of Spirit AeroSystems in 2009 and the business expansion of CTRM, ACM and Upeca has seen the aero-structure manufacturing sub-sector record 100 per cent growth in turnover from RM0.6 billion in 2009 to RM1.2 billion in 2011.

The Aerospace Malaysia Innovation Centre (AMIC), launched by Prime Minister Datuk Seri Najib Razak last year, was established to focus on research and technology as part of an effort to sustain Malaysia's competitiveness in the global arena.

It will become an industry-led collaborative research outfit involving global leaders such as EADS and local counterparts including the Malaysian Industry-Government Group for High Technology (MIGHT).

As for avionics manufacturing, the relocation of United States-based Honeywell Aerospace Avionics to Malaysia has given the country a strategic advantage. This sub-sector, which captured approximately RM1.3 billion of turnover last year, is also supported by other multinational corporations, with a huge potential of developing the local supply chain.

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Accelerating our aerospace sector