MAKING IT LOCAL

Malaysia 2017 | AEROSPACE | INTERVIEW

TBY talks to Saji Raghavan, Country Director-Malaysia & Brunei at Rolls-Royce, on the local demand for a strong aerospace industry, the role partnerships will play in meeting the Malaysian Aerospace Blueprint, and its strategy going forward.

Saji Raghavan
BIOGRAPHY
Saji Raghavan is responsible for Rolls-Royce’s Malaysia and Brunei strategy, and oversees all its key business sector activities in the markets. He joined Rolls-Royce in 2014, having held senior management positions in various global companies, the most recent being Alstom’s Country President-Malaysia & Philippines. Raghavan has a degree in mechanical engineering from Universiti Teknologi Malaysia and a master’s in business administration from Ohio University, US. He currently sits on boards of the Malaysian National Energy Consultative Panel, the Energy Council of Malaysia (ECOM) committee, Powergen Asia Advisory Board, and SIRIM Bhd and its subsidiaries.

What is the status of your order book?

Our aerospace business had an order book of over GBP67 billion in 2015, which is more than 80% of our total order book. Of this, over 50% of our orders come from the Middle East and Asia. We built the Seletar Campus to increase our manufacturing capacity and we wanted to be closer to our globally located customers. The campus is our first facility outside the UK to assemble and test the Trent aero engine and manufacture our crown jewel technology, the wide chord fan blade. It opened in February 2012 at an investment of over GBP350 million. This is a complex business; each engine has around 18,000 components with 35,000 parts. We work with over 8,000 companies in 70 countries; each of them plays their part in producing our products. It is like conducting the world's largest orchestra.

What is your strategy for managing this global process?

We have three key principles for our global production process. The first is to have operational excellence in our supply chain, embedding a lean approach across all of our sites. Second, we want engineering excellence, and third we want to capture after-market value through customer satisfaction. Considering this context and in a bid to improve efficiencies, we are building a supply chain ecosystem to support our Seletar Campus. Some of our global suppliers have chosen to be closer to the campus by establishing their own sites in Southeast Asia, for example in Senior Aerospace in Thailand. In step, we are also on the look out to form new partnerships to strengthen our supply chain.

How have you found the local production capacity to meet your demands?

UMW is our first tier-one supplier in Malaysia, and so far our partnership with UMW is a success story. It was chosen after an extensive bidding process. UMW proved to be ambitious, able, and willing to manufacture and assemble titanium fan cases for our engines. We found them to be the right partner for us. This project also has the support from the Malaysian government, and with that we hope to extend the partnership beyond fan cases for the Trent 1000 and Trent 7000 engines. We are confident that this will lay a strong foundation for engine component hard metal manufacturing in Malaysia. This will be a major cornerstone for the Malaysian Aerospace Blueprint. Our vision is to work with UMW and the Malaysian government, and to build on this success to further the interests of the Malaysian Aerospace Blueprint

How does Rolls-Royce tie into this Blueprint?

We are proud to be making a major contribution to the blueprint's success. We hope that our partnership with UMW will be a catalyst for growth in Malaysia's aerospace industry over the next 15 years. We hope that our 25-year agreement with UMW will also create opportunities for more similar initiatives in Malaysia. The previous blueprint has already created high-income jobs and the aerospace industry contributes MYR11 billion to Malaysia's GDP, and it is projected to reach MYR55 billion by 2030. We need all players, big and small, to join this effort to support the blueprint for its success.

Low commodity prices have impacted many oil-supplying nations across the world. How does it affect your strategy?

We cannot escape the impact of commodity price changes whether up or down. It gives us an opportunity to look at how we do things and make changes to enhance efficiency. For example, we seek to procure components closer to Singapore as this reduces transport and sourcing costs. The other side of the coin is with falling oil prices air travel becomes cheaper; overall, it results in more demand for seats on the major airlines, and by consequence the aerospace industry. We already see Airbus and Boeing pulling in orders, so engine suppliers like us are benefiting from this demand.