Rolls-Royce, the world’s second largest maker of aircraft engines, is bolstering its presence here, a move to help support the British company’s operations in key growth markets of the region such as India and China.
It is to spend upwards of £300 million ($490 million) here to establish a 62,000 sq metre facility, comprising an assembly and testing unit for its commercially successful Trent engine family, and a manufacturing facility for wide-chord fan blades that are central to these engines.
The campus, in the Seletar Aerospace Park, should be complete by the end of this year. It will also house an advanced technology centre and a regional training centre; the latter opened late last month.
As Asia contributes about half the company’s order book of £61 billion ($99 billion), including the defence, marine and energy businesses, its strategy to expand in the city-state reflects a drive to serve customers in the region’s thriving aerospace sector. “Quite early into a boom cycle in Asia, we established major joint ventures for repair and overhaul here and in Hong Kong, and that has sort of led the way,” said Jonathan Asherson, regional director for Southeast Asia.
The engine major has two joint ventures with the Singapore Airlines Engineering Company, both focused on repair and overhaul services to regional and international carriers.
ASIA, INDIA
“We want to attach ourselves, if you like, to the importance of Asia. The importance of the investment decisions that we are making in China, in India and in other locations... It’s more about where we see the growth, recognise that growth and we are embedding, both ourselves and the supply chain,” added Asherson.
Markets like India, where Rolls-Royce has 1,300 engines in service, will grow in importance as the aviation sector matures. Its Trent family of engines particularly stands to benefit as India’s long-haul routes develop further and more players enter the fray.
“Rolls-Royce continues to see strong economic growth in the Asia-Pacific region. GDP (gross domestic product) growth for the region is projected at around six per cent (annually) for the next 10 years, with India’s own at around 8.5 per cent. Therefore, this makes India a major catalyst,” said James Barry, vice-president, civil aerospace–Asia. “We see the potential for 150 wide-body aircraft deliveries over the next 10 years, based on India’s strong GDP growth and a moderate traffic growth assumption of 10-12 per cent.”
As much as the upcoming assembly and test unit for the Trent engines — that will put together the Trent 900, which powers the Airbus A380, and the Trent 1000, slated for the Boeing 787s — would drive business, its customers should also benefit from the regional training centre.
“Being closer to that growing customer base, it will provide training. It is, therefore, easier and more cost-effective for our customers to do the training for their operators and service engineers,” explained Asherson.
With approximately half of Rolls-Royce’s total revenue being derived from after-market services, training its own manpower as well as those of its customers is crucial. The $56.5-mn training centre will allow the company’s Asian customers to train manpower in the region, without having to send them to facilities in the UK and US.
There are about 120 Rolls-Royce powered Airbus A320s with Air India, IndiGo and Kingfisher for domestic air services. Jet Airways uses Trent 700 engines in its Airbus A330 aircraft, on long-haul routes.
Also, Rolls-Royce last month entered into a development agreement with GippsAERO, a subsidiary of Mahindra Aerospace, to supply turboprop engines for a new 10-passenger fixed-wing plane in the prototype design stage. And, it has a 50:50 joint venture with Hindustan Aeronautics to manufacture compressor shrouds for civil engines, with production to begin next year.
