Mr Lim Hng Kiang at the Aerospace Supplier Exchange Opening Ceremony

OPENING REMARKS BY MR LIM HNG KIANG, MINISTER FOR TRADE & INDUSTRY, AT THE AEROSPACE SUPPLIER EXCHANGE OPENING CEREMONY ON WEDNESDAY, 27 MAY 2009, 9.10 AM, AT THE SINGAPORE EXPO

Distinguished Guests,

Ladies and Gentlemen,

Good morning

I am pleased to join you this morning for the Opening Ceremony of Aerospace Supplier Exchange 2009.

Overview of global aerospace industry

The global aerospace sector is a multi-billion industry today[1]. With over six million parts in a typical aircraft, coupled with strict industry regulation and high standards, a culture of constant innovation and long development cycles, the aerospace manufacturing industry is indeed a dynamic, demanding and competitive industry.

The aerospace manufacturing industry in Asia Pacific is set to grow at a faster rate than the mature North America and Europe regions[2]. With greater competition, aerospace OEMs will be more cost conscious and move closer to the growing customer bases in the Asia Pacific. This will see more aerospace MNCs relocate their supply chains to lower cost countries in regions such as Asia. Examples include Rolls-Royce in Singapore, as well as Embraer and Airbus setting up base in China.

The movement of these manufacturers will lead to the migration of higher-level aerospace skills and capabilities into Asia Pacific countries such as Singapore. This will broaden and build the critical mass of aerospace manufacturing activity here.

Singapore’s aerospace industry

In 2008, preliminary figures show the aerospace industry in Singapore achieved a record output of more than S$7 billion[3]. We are now one of the most comprehensive aerospace hubs in the Asia Pacific, with a large base of well-established aerospace multinational companies, including GE Aviation, Goodrich, Pratt & Whitney and Safran. An aerospace survey commissioned by IE Singapore last year revealed that these MNCs were well-served by Singapore’s business infrastructure, as well as by Singapore’s highly competitive and competent aerospace supporting industry. Singapore suppliers have been highly regarded as partners, providing turnkey solutions with superior manufacturing capabilities in areas such as precision machining and specialized heat treatment.

Despite the current slowdown, confidence in the aerospace sector remains strong. We find that the majority of Singapore aerospace players continue to place great value in keeping, attracting and training skilled staff, and devote significant resources to business development in aerospace[4].

Growing Singapore’s aerospace industry

To further anchor the aerospace industry, we are transforming Seletar Airport into a leading world-class aerospace facility to meet the region’s rapidly growing aerospace needs. Spread over 300 hectares, the Seletar Aerospace Park will host a wide range of aerospace activities, as well as an upgraded airport to support industrial and business aviation activities. Already, we have Pratt & Whitney setting up their MRO campus in Seletar, home-grown ST Aerospace opening new hangars, as well as a Rolls-Royce plant to manufacture engines for large aircraft.

To enter the international aerospace industry, companies need to be certified. SPRING Singapore, IE Singapore and the Association of Aerospace Industries (Singapore), or AAIS, are working together to promote the adoption of AS 9100, the aerospace industry certification for quality management and systems to local companies.

SPRING Singapore also supports the development and upgrading of our SMEs’ manufacturing and business capabilities under the Capability Development Programme (CDP). This initiative will boost local enterprises’ readiness to support the fast-moving aerospace industry through technology adoption.

With the upsurge of activity in the aerospace industry, more companies are increasingly seeing the benefits of conducting research closer to their markets. To this end, A*STAR initiated the SERC Aerospace Programme to facilitate R&D with the aerospace industry. Aerospace companies can leverage on A*STAR's vast R&D resources to carry out industry-directed research and technology development, and at the same time, form strategic R&D partnerships to reduce investment risks and optimize business opportunities.

To enhance aerospace suppliers’ engineering and integration capability, I encourage companies to form consortia to better serve their customers. By banding together, Singapore companies of complementary capabilities can combine resources, pursue bigger projects and maximize their chances of success. I believe we will be witnessing some signing ceremonies later, which illustrate the usefulness of such partnerships.

IE Singapore has also been working actively to encourage the formation of more of such strategic partnerships among our Singapore-based companies. The iPartners programme is one of IE Singapore’s initiatives to facilitate and support the development of synergistic alliances among Singapore-based companies as they jointly pursue overseas projects. So far, the iPartners programme has supported over 30 consortia, which will generate over S$3 billion of projected overseas sales over the next three years.

Singapore suppliers should also continue to venture out to meet clients in different markets to garner greater mindshare. To this end, they can venture abroad with IE Singapore on trade missions, fairs and exhibitions such as the upcoming Paris Airshow, or join the Global-Asia Trade Exchange (or GATE for short). This year, GATE 09 Aerospace is held in conjunction with the ASX. Jointly organized by IE Singapore and AAIS, 12 aerospace buyers from the US, UK, France and India have flown in specially to meet with Singapore suppliers. What is useful about the meetings is that the buyers are pre-matched with the suppliers based on their requirements, so the business meetings will be more targeted and useful. I wish the participants many fruitful meetings over the coming two days.

Singapore suppliers should make use of this current downturn to strengthen their competitive capabilities so that they can take advantage of the market upturn when it happens. On the part of the Government, we recognize that we must keep the opportunities coming as well by providing the most enabling environment for the industry. As such, we will persevere in our efforts to increase the connectivity of Singapore and pursue air services liberalization in various platforms including ASEAN, APEC, and bilaterally. This is to ensure maximum maneuvering room for air transport service providers and the aviation industry. We hope that such policies will allow us to become a natural air hub for the region and provide a more dynamic market for you.

Conclusion

Singapore is building up its capabilities as an aerospace manufacturing hub. We have to actively promote and publicize our development in this sector. The ASX 2009 is a culmination of the numerous activities conducted by the AAIS over the past year, with the primary aim of raising the profile of local aerospace suppliers, enabling business development and networking, as well as enhancing awareness and knowledge of industry trends and needs. I am confident that ASX can be a hallmark show for aerospace suppliers, adding value not just to the local industry, but to the region as well.

On this note, I congratulate AAIS on the successful launch of a homegrown exhibition and event, and wish you all a rewarding session ahead. 

[1] It is worth over USD 400 billion and is expected to grow at a CAGR of 5.6% between 2004 and 2024, according to

‘Global Aviation Markets – Analysis’, Zinnov LLC, 2007.

[2] The growth rate in Asia Pacific is approximately 6% CAGR in the next 5 years, according to AAIS survey.

[3] EDB.

[4] AAIS-Aerostrategy desktop survey, January 2009.