Mida woos investors to aerospace industry
Published on: Friday, January 18, 2019
By: Bernama
FRANKFURT: The Malaysian Investment Development Authority (Mida) has been actively courting potential investors to the aerospace industry, while highlighting opportunities available to them within it in the country.
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This is linked to efforts at transforming Malaysia into a key international aerospace player.
Yusri Hasnan Chu, the Frankfurt-based Mida Director, pointed out that the turnover from Malaysia’s aerospace industry had steadily grown over the years, from RM11.9 billion in 2013 to RM13.5 billion in 2017.
He said this was a sign of the growing confidence in Malaysia’s capabilities in the industry.
“The aerospace industry has huge growth potential and this is the reason why the Malaysian government is promoting aerospace services which the country can provide.
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“Indeed, Malaysia’s aerospace infrastructure, with well-developed manufacturing and services facilities, is a major attraction for foreign players,” he told Bernama at his office.
According to Mida’s “Malaysian Aerospace Industry Blueprint 2030”, revenue from the aerospace industry will grow to about RM55.2 billion (US$13.8 billion) by 2030, sustaining some 32,000 jobs.
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Indeed, the plan envisages Malaysia to become the foremost aerospace nation in Southeast Asia, and the region’s aerospace hub with a firm foothold in the global market.
The four pillars on which the aerospace edifice rests are the maintenance, repairs and overhaul (MRO) segment, aero manufacturing, systems integration and engineering and design services.
Some Malaysian aerospace companies such as the Kuala Lumpur-based Strand Aerospace are already key players in international aerospace servicing, catering to the designs needs of major international aircraft builders.
Yusri said that two key industries, namely aerospace and medical devices, had also been identified as high-growth segments in the 11th Malaysia Plan (2015-2020).
According to Mida’s Frankfurt office, 107 projects were approved in 2017 and worth a total investment of some Euros 2.818 billion (US$3.37 billion).
Besides the benefits directly accruing from the aerospace industry, other segments that provide a support system to it also stand to benefit.
These include among others, manufacturers/suppliers of jigs and tools fixtures, ground equipment and communication, testing, surface treatment, metal fabrication and precision machining.
Yusri spoke of attractive benefits offered to investors in Malaysia’s aerospace industry, including pioneer status with an income-tax exemption from as much as 70 per cent or even 100 per cent for five to ten years, an investment tax allowance of 60 per cent or 100 per cent on qualifying capital expenditure for five years, reinvestment allowance of 60 per cent on qualifying capital expenditure for 15 consecutive years, import duty exemption for raw materials/components and machinery/equipment.
Some important aerospace parks such as Selangor’s UMW High Value Manufacturing Park, the KLIA Aeropolis and the Subang Aerotech Park, as well as Johor’s Senai Airport Aviation Park and the Usajaya Tech Park, are seen as important sites for aerospace activities.
Aircraft manufacturer Airbus is conducting an 18-month feasibility study on the setting up of an aviation hub and is looking at Malaysia as a possibility.
Malaysia’s AirAsia, which maintains a fleet of 250 Airbus aircraft and is buying 100 units of the A330neo aircraft, has become the Airbus’ biggest customer. AirAsia is considered Asia’s fourth largest airline.
Malaysia is currently home to more than 200 aerospace companies comprising both international and local industry players. These include 66 companies involved in MRO activities, aero-manufacturing (33), education and training (25) and systems integration, as well as engineering and design (11).
Meanwhile, the Malaysian External Trade Development Corporation (Matrade) is encouraging Malaysian aerospace companies to participate in overseas trade shows, conferences and other events related to the industry.
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