Malaysian Companies Diversifying Into Aerospace Sector In Wake Of Flagging Economy

By Harizah Hanim Mohamed KUALA LUMPUR, Dec 8 (Bernama) -- More Malaysian companies are diversifying into the aerospace sector from the oil and gas (O&G) and automotive sectors as a strategy to cushion the impact of the flagging economy, said the Malaysia External Trade Development Corporation (MATRADE). This factor emanated from the weak oil prices and currency instability, said Md Silmi Abd Rahman, the Director of MATRADE's Transport, Defence and Maintenance, Repair and Operations (MRO) Products and Services Promotion Division. Brent crude oil price slipped 1.75 per cent to US$53 per barrel on Thursday, while WTI crude oil was at US$49.77 per barrel. MD Silmi said most of these companies were seeking opportunities in the high-value manufacturing industry. "So, the aerospace industry comes first, supported by the growth posted by the Malaysian aerospace sector which expanded nine per cent, surpassing the global growth of seven per cent," he told Bernama in conjunction with the three-day Kuala Lumpur International Aerospace Business Convention 2016 here Thursday. MATRADE has conducted 2,200 business-to-business meetings last year, for which sales worth US$30.94 million (RM137 million) were generated by Malaysian companies. MD Silmi said Malaysian small and medium enterprises (SMEs) should take an active role in the aerospace supply ecosystem, as more international companies were shifting towards Malaysia as an alternative to European suppliers. "This is in line with the 3M concept that we are aggressively promoting, for which Morocco is the supply hub for the European market and Mexico for the United States," he said, adding that MATRADE was striving to turn Malaysia into a hub for the Southeast Asian or Asia-Pacific regions," he added. Md Silmi said MATRADE, the national trade promotion agency, together with local suppliers, were in serious talks with potential customers from the Middle East, particularly Saudi Arabia, who were looking for alternatives for MRO services. "The weakening of oil prices has hasten the process and we expect it (the talks) to be concluded in the first quarter of next year. The MRO is for the military and commercial segments," he added. Meanwhile, MARA Aerospace Technologies Sdn Bhd Chief Executive Officer Naguib Mohd Nor said 20 companies under MARA's supervision had ventured into the aerospace industry or were in talks to enter the industry. "One of them is WZ Satu Bhd's subsidiary, WZS Technologies Sdn Bhd which is now involved in the manufacturing equipment for the aerospace sector," he added. The aerospace segment has contributed 70 per cent to WZS Technologies' revenue, while the rest came from the automotive and O&G segments. --BERNAMA