SPEECH BY MR LIM HNG KIANG, MINISTER FOR TRADE AND INDUSTRY AT ST AEROSPACE ENGINEERING’S HANGAR 600 OPENING AND HANGAR 700 GROUNDBREAKING, TUESDAY, 24 APRIL 2007, SELETAR AEROSPACE PARK, AT 3.10 PM

Distinguished Guests,

Ladies and Gentlemen,

Introduction

Good afternoon to all of you. I am pleased to join you today for the opening of Hangar 600 and the groundbreaking of Hangar 700 for ST Aerospace.

The aerospace industry is one of the fastest growing industries in Singapore. Last year, it posted a sterling growth of 19.7% to reach a record S$6.3 billion in output. To ensure the continued growth of our aerospace industry, we need to provide the infrastructure to enable companies to grow and expand on their strengths here in Singapore. SeletarAerospacePark will be integral in providing this infrastructure

ST Aerospace started out as a humble maintenance depot for the RSAF in 1975.Since then, it has grown rapidly into the world’s largest third-party Maintenance, Repair and Overhaul company, or MRO in short, today. ST Aerospace’s commitment to impeccable quality standards and competitive turnaround time has further established its position as a sought-after service provider, to the extent that many of its customers choose to fly their planes into Singapore for the sole purpose of maintenance. I was told that more than 85% of ST Aerospace’s revenue comes from customers outside Singapore, and ST Aerospace counts a number of major companies in Asia-Pacific, the Middle East, Europe and the US as their clients.

Seletar Aerospace Park – Four Growth Areas

The strong investment commitment by ST Aerospace is a resounding endorsement of the Government’s decision to develop Seletar Aerospace Park. Together with SeletarAirport, it represents close to 300 hectares of contiguous land, which makes it a highly significant development in land-scarce Singapore. To put it in perspective, the SAP, at about 140 ha, is more than 5 times the size of the Airport Logistics Park of Singapore (ALPS) at Changi, which stands at 26 hectares. We are willing to make this major commitment nevertheless, because we see the potential for significant returns – by 2018, we expect Seletar’s contribution to the aerospace industry and Singapore’s economy to be about S$3.3 billion yearly in direct and indirect value-add. About 10,000 jobs covering a range of skill levels will also be created for the local aerospace industry. Many of these knowledge-intensive jobs would command good pay for our workers.

The growth will come from the expansion of companies in Singapore, who have contributed to the strong average annual growth of more than 13 per cent over the past 16 years. This growth would not be possible if not for the healthy development of the global aviation industry, in particular in Asia, over this period. It will also come from new activities and new companies. We have identified 4 areas which have significant growth potential:

First, the design and manufacturing of aircraft systems and components, in response to the growing trend of aerospace companies looking for locations that offer total cost-competitiveness, quality, reliability and the requisite high level of engineering expertise

Second, the creation of a regional aerospace training campus to cater to our growing manpower needs and to export our training services to the region. The growing global shortage of aerospace manpower has been identified as one of the industry’s greatest constraints on future growth.

Third, the establishment of Singapore as a business aviation hub within the region. With the growth of private wealth management in Singapore and tourism developments such as the integrated resorts, there will be increased business aviation traffic in Singapore. We are also ideally situated to have aircraft based here to serve regional business and luxury travel needs.

Finally, Seletar will host MRO activities for smaller aircrafts ranging from helicopters to narrow-body jets. This will include the conversion, cabin interior completion and modification of aircraft. These are a natural extension of our existing strengths in MRO for larger commercial aircrafts.

To ensure that the infrastructure at SeletarAerospacePark is designed to optimally support this growth, JTC has been carefully considering feedback from all stakeholders, including the industry’s requests for airport upgrades.

As part of the masterplan, the SeletarAirport runway will be extended, with additional upgrading works done for the apron and taxiway. Upgrading will also be done for the power network, ATC communications systems and terminal building. We are on track to begin site works from the second half of 2007 and will commence allocating industrial land to companies later this year.

Singapore As A Comprehensive MRO Hub

MRO is a core activity that forms the foundation for Singapore’s aerospace industry.We now have one quarter of the fast growing Asian MRO market share. Our success can be attributed to our reputation for quality, efficiency and reliability. We are also recognised as Asia’s most comprehensive MRO hub, with nose-to-tail capabilities spanning airframe maintenance and modification, engine overhaul, as well as components and systems repair. The components we service run the gamut from the humble in-flight meal cart to highly complex engine and avionics systems.

These comprehensive capabilities allow us to offer a “one-stop” integrated solution for customers. It is a unique value proposition in the region that becomes especially relevant as airlines look to outsource more, so that they can focus on their core business of selling seats. The regional and budget airlines are at the forefront of such outsourcing efforts.

ST Aerospace’s investment to develop its hangar facilities to service narrow-body jets used by many low-cost and regional carriers is therefore very opportune. With an investment of $27 million, these two hangars can accommodate up to three narrow-body jets such as the Boeing 737 and Airbus 320 at a time. They will allow ST Aerospace to capture more MRO work from the rapidly growing Asian budget airlines, and help generate downstream engine and component MRO as well.

Conclusion

ST Aerospace has been a key player in our aerospace industry and has contributed no small part in growing the industry. Today’s groundbreaking and hangar expansion are testimony of your continued commitment to grow the capabilities and capacity of Singapore’s aerospace industry. It is my great pleasure to now declare Hangar 600 open.