MRO industry gearing for rapid global growth
First published in The Malaysian Reserve on 25 November 2013
26 NOVEMBER 2013 (The Malaysian Reserve)
The aircraft and marine maintenance repair and overhaul (MRO) industry in Malaysia is gearing to boost capacity and enhance its services to attract more global players to the country.
As customers are operating in an increasingly competitive landscape that calls for airline fleets to operate at peak performance, GE Engine Services Malaysia Sdn Bhd (GEESM), a company that specialises in aircraft engines, said it plans to boost capacity by bringing in additional high-tech equipment such as grinding and balancing machines.
"To respond to customer needs, GE is committed to enhancing services through increased investment in infrastructure and human capital."
"With increased capacity comes a growing responsibility to ensure continued quality of services, and we will also continue to invest in training and up-skilling initiatives to strengthen our human capital capabilities," GE Asean CEO Stuart Dean told The Malaysian Reserve.
Touching on the MRO industry in Malaysia, GEESM MD Suresh Kumar Shunmugam said the company is encouraged by the rapid growth of airline passengers in the region as this will translate into increased opportunities for the MRO sector.
"Malaysia is among the top three countries in Asia Pacific for MRO services and will continue to remain a competitive market due its strategic location and accessibility to the region as well as costs and quality of talent."
"Some of the biggest carriers such as AirAsia Bhd and Malaysia Airlines are based out of Malaysia and this is further bolstered by progressive government initiatives such as the Economic Transformation Programme and the government's commitment to increase human capital in high-growth sectors such as aviation," he said.
GEESM has to date serviced up to 1,000 engines and over recent years, the company has serviced on average up to 100 engines per annum and aims to increase this by 100% by 2016.
Suresh said the aviation landscape is fast evolving. Increased competition and rising fuel prices have placed added pressure for airlines to enhance operating efficiency and save on costs and this creates more aggressive customer demands.
"Airlines want quicker turnaround at lower cost and to address this, we need teams that are agile and responsive to change," Suresh said.
Meanwhile, Destini Bhd, a marine and aviation MRO player, expects to benefit from the investments into the aviation MRO industry in Malaysia.
Group MD Datuk Rozabil Abdul Rahman said the company has taken various initiatives in the past two years to strengthen its position in three key strategic businesses namely aviation, marine and oil and gas (O&G).
"We are developing ourselves to be an integrated engineering solutions provider in these sectors and the expansion will diversify our sources of revenue compared to the previous years where the company is highly dependent on the aviation MRO activities."
"In addition to Malaysia's operations, Destini also receives income from its overseas operations which now stretches from Dubai to Australia and China to Singapore and our sales reached as far as Brazil and the North Sea."
He said, however, going global brings new challenges for Destini as the company needs to continue to develop its capabilities in terms of technology, human resources, financial management and operations in various legal jurisdictions and continuously turning itself into a homegrown multinational company to overcome these global challenges.
As for the marine MRO services, Rozabil pointed out that the global market offers good prospects especially in the demand for safety and survival equipment.
This is in line with the new regulation set by International Maritime Organisation that all ship operators and owners need to abide by the ruling and change the on/off load hook release systems for lifeboats, which is mandatory from July 1, 2014.
"It is estimated that about 190,000 vessels will be affected by this new regulation and this is good news for Destini."
Destini provides MRO services for the safety and survival equipment in the aviation and marine sectors and has acquired 51% stake in Vanguard Composite Engineering Pte Ltd, a Singapore-based company involved in the manufacturing of lifeboats and a 100% stake in Techno Fibre Group in October 2013, which is involved in MRO services for the marine sector.
Both acquisitions are expected to broaden the company's income base as the companies have businesses that synergise with Destini's core business.
According to global business consulting firm Frost & Sullivan, Malaysia is among the three leading countries for the aviation MRO services in the Asia Pacific after Singapore and Hong Kong.
The government has set in place incentives and policies with the aim to capture a higher market share in this lucrative industry and position Malaysia as a major global player by 2015 as well as a regional outsourcing centre for Asia Pacific.
***Net cash co, MRO co, O&G co by taking over Samudra, Market player Dato ***** is a man behind, close to Mindef.... apa lagi Destini mau? Jawab nya, Destini mau jalan saja! ***