Malaysia 2017 | AEROSPACE | B2B

Malaysia is working hard to develop the skills and expertise to create a lean and efficient aerospace sector, and has partnered with key stakeholders to holistically develop the local industry.

Badrul Feisal Abdul Rahim
President & Group CEO
UMW Holdings
Uncut interview available only to premium users.
Shamsuddin Mohamed Yusof
Group COO
Composites Technology Research Malaysia
Uncut interview available only to premium users.

How have your business lines developed in the Malaysian market?

BADRUL FEISAL ABDUL RAHIM At present, we have four divisions: automotive, oil and gas, equipment, and manufacturing and engineering (M&E). As with any other organization, we consistently scan the horizon for new business opportunities and seek to address any gaps within the group. To cut it short, one of the things we realized was the need to expand the global reach of our M&E division by upgrading its skill set and products. We have relatively good engineering skills. We wanted to continue building on this engineering base but move beyond producing somewhat commoditized products, as such products tend to lead to lower profit margins. The aerospace industry is a great fit for our ambitions. Aircraft manufacturers require strong, lean manufacturing competency in order to handle increasing volumes of production and we have existing capabilities that can be adapted to the industry. This business will allow us to migrate from labor-intensive manufacturing to high-value manufacturing and will also allow us to reposition our core competencies, embarking upon precision machining and assembly of crucial aerospace components.

SHAMSUDDIN MOHAMED YUSOF CTRM was established in 1990 under the Ministry of Finance with the objective to become a global composite production hub. This is a capital-intensive industry, with a high level of skills required for staff. The government assisted us by channeling grants and providing incentives for our industry to flourish. Through these efforts, we were able to establish ourselves as the pioneers in composite manufacturing, which was a new field for Malaysia. CTRM has over the years invested heavily in high-tech equipment and machinery, and we are now looking at growth. Loyalty and persistent commitment to our existing major customers over the years have further complemented CTRM in shaping its future strategic business plan. The market of composites part manufacturing is open, and we intend to focus on our major customers to remain cost competitive, especially in development activities. The acquisition of CTRM by DRB-HICOM in November 2013 has further accelerated the growth of the company from a MYR300 million turnover in 2012 to more than MYR800 million in 2015, after a major CAPEX investment of approximately MYR135.7 million as part of plant capacity expansion. This has further strengthened customers' confidence, which in turn has seen our order books rise to almost MYR12 billion until 2030.

Both companies have strong partnerships. How has this cooperative approach strengthened your respective businesses?

BFAR In 2014, we heard Rolls-Royce was on the lookout for a co-producer for its Trent 1000 and Trent 7000 aircraft engines. It has been developing Southeast Asia as part of its supply chain for a number of years, and has a large assembly facility in Seletar Aerospace Park in Singapore. Naturally, it made sense for Rolls-Royce to look to Malaysia to source its components and that was where we came in. We are known for our expertise in the automotive sector because of our long-standing partnership with Toyota; therefore, excellence in engineering has always been a big part of the group's DNA. We realized, however, that we needed to further develop this capability to be ready for the rapid developments in technology to move up the value chain and stay globally competitive. We are truly honored by Rolls-Royce's confidence in UMW. It took two years of due diligence and demonstrating our capacities and commitment to finalize this partnership and to become its tier-one supplier.

SMY Currently, we have 14 projects with the Aerospace Malaysia Innovation Centre (AMIC), of which we have completed three. Our partnership has been instrumental to our technical development and improvement. One of the stakeholders in AMIC is Airbus, which has provided critical technical advice over the years. AMIC works hand-in-hand with CTRM on improving process efficiency, productivity, and product quality. We work jointly to introduce Radio Frequency Identification (RFID) in our labor-intensive production process, and we explore the possibility of using robotics. Through AMIC's initiatives and global research, we can bring state-of-the-art technology to Malaysia and reduce our reliance on human resources, which is a critical part of high-tech manufacturing. These new technologies complement the production processes that we have in place, and are aimed at achieving consistency and accuracy. We work also closely with AMIC to localize our tools, which will tremendously reduce our maintenance activities. We have developed a mobile entity with portable equipment that we can use for repairs within our facilities. The collaboration with AMIC, paired with the support from Airbus, has accelerated our advancement in technology development.


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