SELANGOR AEROSPACE ACTION PLAN 2020 - 2030 FINAL REPORT

SELANGORAEROSPACEACTIONPLAN2020-2030FINALREPORT

STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER Deliverable Acceptance Sheet

PREPARED BY: Name of Deliverable: Final Report

Version: V2

This report is the final action plan document which contains

information on the aerospace industry’s current status in

Selangor, the issues faced by aerospace companies,

recommendations to resolve such issues and a consolidated

action plan composed of high impact programs that has been

Description of

developed from global best practices as well as

understanding of local business environment. This document

Deliverables:

has been prepared through a series of deliberations in the

form of workshops with aerospace industry participants as

well as government agencies to come up with possible

interventions and identify various types of assistance that can

be offered by government agencies to promote the

aerospace industry in Selangor, Malaysia.

Prepared By: Frost & Sullivan GIC Malaysia Sdn. Bhd.

Signature:

Date: October 2019

COMMENTS

SIGN OFF BY: Name

Designation

Client Invest Selangor Berhad

Signature

Date:

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER

TableofContents 1 Executive Summary ........................................................................................................... 12

2 Action Plan Considerations ................................................................................................ 14

2.1 Background................................................................................................................. 14

2.2 Action Plan Concept ................................................................................................... 15

2.3 Guiding Principles ....................................................................................................... 16

2.4Key Action Plan Segments and Items ......................................................................... 17

2.4.1 Aerospace MRO .................................................................................................. 17

2.4.1.1 Current State Assessment ............................................................................ 17

2.4.1.2 Issues Affecting Aerospace MRO Players (Voice of Industry Players) .......... 21

2.4.1.3 Action Plan Items (Solutions to issues in the MRO Industry) ......................... 23

2.4.2 Aerospace Manufacturing .................................................................................... 26


2.4.2.2 Issues Affecting Aerospace Manufacturing Players (Voice of Industry Players) 33

2.4.2.3 Action Plan Items (Solutions to issues in the Manufacturing Industry) ........... 35

2.4.3 Systems Integration, Engineering and Design Services Players .......................... 37


2.4.3.2 Issues Affecting Systems Integration, Engineering and Design Services Players (Voice of Industry Players) ................................................................................. 41

2.4.3.3 Action Plan Items (Solutions to issues in the SI, Engineering & Design Industry) 42

2.4.4 Aerospace Training and Education ...................................................................... 45

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2.4.4.2 Issues Affecting Aerospace Training and Education Players (Voice of Industry Players) 48

2.4.4.3 Action Plan Items (Solutions to issues in the Training & Education Industry) 49

2.4.5 Other Issues Affecting Multiple Aerospace Verticals ............................................ 51

2.4.5.1 Other Issues Affecting Aerospace Players (Voice of Industry Players) .......... 52

2.4.5.2 Action Plan Items (Solutions to issues in the Industry) .................................. 54

2.5Action Plan Items (High Impact Programs) – Best Practices ....................................... 56

2.5.1 Summary of Action Plan Items ............................................................................. 56

2.5.2 Action Item – Case Studies .................................................................................. 58

2.5.2.1 Regulatory Changes ..................................................................................... 58

2.5.2.2 Bilateral Aviation Safety Agreements ............................................................ 59

2.5.2.3 Certification Support Program for SMEs ....................................................... 59

2.5.2.4 Investment Grants ........................................................................................ 60

2.5.2.5 Offset Policy Development ............................................................................ 60

2.5.2.6 Export Finance Support ................................................................................ 61

2.5.2.7 Equipment Purchase Funding for SMEs ....................................................... 61

2.5.2.8 Aerospace Park Development ...................................................................... 61

2.5.2.9 Aerospace Industry Market Development Initiative ....................................... 62

2.5.2.10 Selangor Export Promotion Agency .............................................................. 63

2.5.2.11 Investment in Research and Development Program ..................................... 63

2.5.2.12 Tax Credit for Research & Development ....................................................... 63

2.5.2.13 Research Co-ordination Council ................................................................... 64

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER 2.5.2.14 Aerospace Supply Chain Enhancement Fund ............................................... 64

2.5.2.15 Aerospace Skills Council .............................................................................. 65

2.5.2.16 Student Internship Program .......................................................................... 65

2.5.2.17 Government Funded Training Program ......................................................... 66

2.5.2.18 Hiring Grants for SMEs ................................................................................. 66

2.5.2.19 Aerospace Talent Portal ............................................................................... 67

2.5.2.20 Drone City Concept ...................................................................................... 67

2.5.2.21 General Aviation City .................................................................................... 68

3 Current Involvement of State and Federal Agencies in Aerospace Industry ....................... 70

3.1 Ministry of Transport (MOT) ........................................................................................ 70

3.2 Civil Aviation Authority of Malaysia (CAAM) ................................................................ 71

3.3 The Malaysian Aviation Commission (MAVCOM) ....................................................... 72

3.4 The Malaysian Industry-Government Group for High Technology (MIGHT) ................ 73

3.5 National Aerospace Industry Coordinating Office (NAICO) ......................................... 74

3.6 Malaysian Investment Development Authority (MIDA) ................................................ 74

3.7 Malaysia External Trade Development Corporation (MATRADE) ................................ 75

3.8 Malaysia Aerospace Industry Association (MAIA) ....................................................... 76

4 Implementation Considerations .......................................................................................... 78

4.1 Governance Structure for implementation ................................................................... 78

4.2 Consolidated Action Plan ............................................................................................ 79

5 Appendices ........................................................................................................................ 80

5.1 Progress Update ......................................................................................................... 80

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5.2 Workshop 1 – Developer (UMW and MAHB) .............................................................. 81

5.2.1 Session with UMW ............................................................................................... 81

5.2.2 Session with MAHB ............................................................................................. 83

5.3 Workshop 2 – Industry players .................................................................................... 87

5.4 Workshop 3 & 4: Federal and state agencies .............................................................. 91

5.5 FGD with Aerospace MRO .......................................................................................... 92

5.6 FGD with Aerospace Manufacturing ........................................................................... 93

5.7 FGD with System Integrations, Engineering and Design Services .............................. 93

5.8 FGD with Aerospace Training and Education .............................................................. 94

5.9 Workshop 5: Review and feedback from executive committee .................................... 94

5.10 Workshop 6: Selangor State GLC Consortium ............................................................ 95

5.11 Workshop 7: Town hall Meeting in presence of Menteri Besar, Selangor .................... 95

5.12 Industry Banners for Townhall Meeting ..................................................................... 100

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ListofFigures

Figure 1: Guiding principles adopted in development of Action Plan ......................................... 16 Figure 2: Malaysia MRO Industry Value Chain .......................................................................... 17 Figure 3: Malaysia MRO Industry Capability Breakdown ........................................................... 20 Figure 4: Malaysia MRO Industry Revenue Trends ................................................................... 20 Figure 5: Aerospace MRO Action Items ..................................................................................... 23 Figure 6: Malaysia Aerospace Manufacturing Value Chain ....................................................... 27 Figure 7: Malaysia Aerospace Manufacturing Industry Revenue Trends ................................... 27 Figure 8: Malaysia Aerospace Manufacturing Value Chain ....................................................... 28 Figure 9: Most Common Technological Capabilities of Major Malaysian Aerospace Manufacturing Companies ......................................................................................................... 32 Figure 10: Base Locations of Major Malaysian Aerospace Manufacturing Companies ............. 33 Figure 11: Summary of Certifications held by Major Malaysian Aerospace Manufacturing Companies ................................................................................................................................. 33 Figure 12: Aerospace Manufacturing Action Items .................................................................... 35 Figure 13: Systems Integration Key Participants in Malaysia .................................................... 38 Figure 14: Engineering & Design Key Participants in Malaysia ................................................. 39 Figure 15: Research & Development Key Participants in Malaysia ........................................... 40 Figure 16: Aerospace Systems Integration and Engineering & Design Services Action Items .. 42 Figure 17: Aerospace Education and Training Action Items ...................................................... 49 Figure 18: Issues Affecting Multiple Aerospace Segments ........................................................ 52 Figure 19: Other Action Items .................................................................................................... 54 Figure 20: The role of MAVCOM, MOT and CAAM ................................................................... 72

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER Figure 21: Action Plan Governance Structure ............................................................................ 78 Figure 22: Consolidated Action Plan .......................................................................................... 79 Figure 23: Industry Workshop Attendees Profile ........................................................................ 90 Figure 24: Industry Workshop Issue Scoring ............................................................................. 90 Figure 25: ASEAN Fleet and MRO Forecast ............................................................................ 100 Figure 26: Malaysian Fleet and MRO Dynamics ...................................................................... 100 Figure 27: Malaysian MRO and Manufacturing Revenue Trends ............................................ 101 Figure 28: Asia Pacific MRO Forecast and South East Asia MRO Forecast by Country ......... 101 Figure 29: ASEAN Fleet and MRO Comparison by Country and Segments ............................ 102 Figure 30: ASEAN MRO Demand by Airframe, Engine and Components ............................... 102

ListofTables

Table 1: Action Plan Workshop process .................................................................................... 15 Table 2: Major Aerospace MRO Players in Malaysia ................................................................. 18 Table 3: Issues Affecting Aerospace MRO Players in Malaysia ................................................ 21 Table 4: Major Aerospace Manufacturing Players in Malaysia .................................................. 28 Table 5: Technology Capabilities of Major Malaysian Aerospace Manufacturing Players ......... 29 Table 6: Issues Affecting Aerospace Manufacturing Players in Malaysia .................................. 33 Table 7: Systems Integration Key Participants in Malaysia ........................................................ 38 Table 8: Engineering & Design Key Participants in Malaysia ..................................................... 39 Table 9: Research and Development Key Participants in Malaysia ........................................... 40 Table 10: Issues Affecting Aerospace Industry Systems Integration, Engineering & Design Players in Malaysia .................................................................................................................... 41

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER Table 11: Specifications of Major Malaysian Aerospace Training Institutes .............................. 45 Table 12: Issues Affecting Aerospace Training & Education Players in Malaysia ..................... 48 Table 13: Other Issues Affecting Aerospace Industry Players in Malaysia ................................ 52 Table 14: List of Action Plan Items and Segments Impacted ..................................................... 56 Table 15: Global Examples of Offset Policy ............................................................................... 60 Table 16: Project Timeline .......................................................................................................... 80 Table 17: Workshop 2 attendees ............................................................................................... 87 Table 18: Workshop 3 attendees ............................................................................................... 91 Table 19: Aerospace MRO FGD attendees ............................................................................... 92 Table 20: Aerospace Manufacturing FGD attendees ................................................................. 93 Table 21: Aerospace Systems Integration and Engineering and Design FGD attendees .......... 93 Table 22: Aerospace Training and Education FGD attendees ................................................... 94 Table 23: Executive committee .................................................................................................. 94 Table 24: Selangor State GLCs ................................................................................................. 95 Table 25: Town hall participants from agencies and industry .................................................... 96

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ListofAbbreviations

A*STAR Agency for Science, Technology and Research

AMIC Aerospace Malaysia Innovation Center

ASEAN Association of Southeast Asian Nations

ATSB Astronautic Technology Sdn Bhd

BA Business Aviation

BASA Bilateral Aviation Safety Agreement

BOI Board of Investment

CAAM Civil Aviation Authority of Malaysia

CAAS Civil Aviation Authority of Singapore

CAA Civil Aviation Act

CAD Computer Aided Drafting

CAGR Compounded Annual Growth Rate

CoE Center of Excellence

DCA Department of Civil Aviation

DFTZ Digital Free Trade Zone

DGTA Directorate General Technical Airworthiness

DOE Department of Environment

DTI Department of Trade and Industry

EASA European Aviation Safety Agency

EU European Union

FAA Federal Aviation Administration

FGD Focus Group Discussion

FDI Foreign Direct Investment

GST Goods and Services Tax

ICAO International Civil Aviation Organization

KLIA Kuala Lumpur International Airport

MAC Malaysia Aerospace Council

MAHB Malaysia Airports Holdings Berhad

MAIA Malaysia Aerospace Industry Association

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MARA Majlis Amanah Rakyat

MAS Malaysia Airlines Berhad

MATRADE Malaysia External Trade Development Corporation

MAVCOM Malaysian Aviation Commission

MDEC Malaysia Digital Economy Corporation

MIDA Malaysian Investment Development Authority

MIGHT Malaysian Industry Group for High Technology

MITEC Malaysia International Trade and Exhibition Centre

MITI Ministry of International Trade and Industry

MoE Ministry of Education

MoT Ministry of Transportation

MoU Memorandum of Understanding

MRO Maintenance Repair & Overhaul

NADCAP National Aerospace and Defense Contractors Accreditation Program

NAICO National Aerospace Industry Coordinating Office

OEM Original Equipment Manufacturer

OJT On Job Training

R&D Research & Development

SEA Southeast Asia

SME Small Medium Enterprises

SST Sales and Services Tax

TDA Technology Depository Agency

TVET Technical Vocational Education and Training

UAS Unmanned Aerial Systems

UAV Unmanned Aerial Vehicle

UK United Kingdom

USA United States of America

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1 Executive Summary The state of Selangor has been proactive to support the growth of the aerospace industry and wanted to further develop an action plan that would address the challenges being faced by aerospace companies and provide necessary support systems. This would certainly emphasize the fact that, the state of Selangor would not rest on the laurels that it houses the highest number of aerospace companies located within Malaysia and is accountable for majority of the revenue coming from aviation industry, but continue on the path of making Selangor as the number one choice of investment for the aerospace industry across the world. In order to achieve that, a comprehensive action plan is being prepared for the aerospace industry in the state of Selangor, that sets the direction of further growth and aims to tackle the issues and challenges being faced by the aerospace industry. The Selangor Aerospace Action Plan 2020-2030 has been developed through a series of meetings and discussions with federal and state agencies as well as wider aerospace community to gain input in developing an Action Plan for the aerospace Industry. The action plan is aligned to the Malaysian Aerospace Blueprint 2030 having identified the core sub-sectors such as MRO, aerospace manufacturing, systems integration, engineering & design as well as training & education. It also aims to solve the issues being faced beyond core sectors such as business aviation as well as common issues that affect multiple segments and the wider industry. The action plan recognizes the fact that there is an increasing gap between the current performance of the aerospace industry and the vision set for 2030 as per the blueprint. The action plan is hence a tool to identify challenges and resolve them in order to reduce the gap and realise the vision set for 2030. The action plan identified, number of issues that need to be tackled at seven different areas namely – infrastructure, regulations, market access, incentives, funding, education & training and few other common initiatives. In total, thirty (30) unique action items have been recognised that will have impact across multiple aerospace segments out of which majority can be taken up by the state while few need federal interventions. The action plans also identifies core sub-sectors of the aerospace industry such as aerospace manufacturing and MRO activities that could be identified as quick wins for the state of Selangor in the near future. At the same time, it does recognize that aerospace training & education as well as systems integration, engineering and design are pivotal for long term growth of the industry. Lastly, the action plan also looks at few concepts to promote aviation among the youth as well as find common platforms that have industrial applications for the aerospace industry. Few such concepts identified are drone city, general aviation city, aircraft tear down and recycling facilities etc. As we take a deeper dive into some of the initiatives being planned, noteworthy mentions under funding initiatives would be setting up a training program in collaboration with several technician training institutes in Selangor and fund a common facility, investment grants for capital

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER expenditure with fixed cap, export finance support for companies in Selangor by providing loan guarantee to banks thereby backing it up, equipment purchase funding for high performing SMEs, targeted fund for supply chain enhancement for specific segments and R&D tax credit system to invest into research activities. Action items under the ambit of infrastructure would be to develop shared testing and engineering facilities with equipment so as to offer services to the industry on pay as you go basis, aerospace park and general aviation city to free up land at Subang for MRO activities and include activities such as aircraft tear-down and recycling facility etc. A MAHB-ISB-KNB taskforce for Subang infrastructure improvement and develop build-to-suit facilities and offer tenants on long term leasing at low rates where ownership is retained by government and assets are returned after lease. Another action area is market access where two initiatives being planned are formation of Selangor Export Promotion Agency to showcase SME capabilities and aerospace industry ecosystem development through linkages with local companies. Some of the initiatives being planned under incentives are offering enhanced incentives for aerospace parks specific to Selangor for ITA, tax-rebate, exemption (Free Trade Zone) etc. Other two initiatives are certification support program for SMEs including mentorship and incentives and the state of Selangor co-investing in a ‘Student Internship Program’ with local aerospace majors. Couple of items in the realm of education and training would be subsidizing SMEs up to a few years for hiring fresh graduates, formation of Selangor Aerospace Skills Council and aerospace talent portal for job search and employee-employer matching. Some of action items under regulatory matters would be standardization of regulations for private and state-owned aircraft such as police, fire safety, maritime etc., and Bilateral Aviation Safety Agreements in both MRO and manufacturing activities to reduce approval needs to serve foreign customers and mutual recognition. Some of the other initiatives being planned would be to create a drone park to promote aerospace among youth and support research activities in drones (UAV), and a research roadmap to be developed in collaboration with industry players. The successful implementation of the action plan needs collaboration between the industry and the government agencies as well as cooperation amongst various agencies as each of the initiatives identified will need to involve various stakeholders. In order to implement these initiatives, Invest Selangor has been recommended to act as the program manager and facilitator while a separate SPV would be required in order to drive any investments. As we are competing between neighbouring nations for investments within the aerospace industry, where wage rates and cost of infrastructure may be similar or lower, the state as well as the nation recognizes that not only the value proposition and benefits to the industry needs to be an attractive one but at the same time teething problems need to be resolved. Selangor is in a unique position having international airport gateways, necessary infrastructure, supply of skilled manpower coupled with low wage rates and a currency that makes it attractive for global aerospace players to set up shops in Malaysia. Nevertheless, as other ASEAN players gear up in attracting aerospace industry, it will not only be the incentives to set up operations but long term growth prospects in the nation. Once various initiatives are implemented for Selangor, it would lead to faster growth of aerospace industry in the state as well as drive newer

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER investments thereby making Selangor as the number one choice of aerospace investments across the world.

2 Action Plan Considerations 2.1 Background

The state of Selangor wanted to develop an action plan for further development of the aerospace cluster in Selangor aligned to the Malaysian Aerospace Blueprint 2030. The objective of this project is to alleviate the challenges faced by companies in Selangor so as to further bolster the position of the aerospace cluster in Selangor as a major hub of aerospace industry hub in the future. Invest Selangor has therefore engaged Frost & Sullivan GIC Malaysia Sdn. Bhd. to aid in assessing the aerospace business dynamics in Malaysia and in particular of Selangor in order to further tap into the growth potential of the aerospace industry. Apart from uncovering the market dynamics of aviation business in Malaysia, the study also aims to understand the roles and strategic directions of key entities that aim to build the aerospace parks and estates as part of the Selangor Aerospace Cluster spread across Sepang, Subang, Serendah and rest of Selangor. Finally, Invest Selangor intends that the action plan to be aligned with the national aerospace agenda of Malaysia included in the 2nd national aerospace blueprint. The project objectives are:

• Geography - Align and prioritize direction of aerospace infrastructure development for the state of Selangor, in order to support the industry across OEM, MRO, design and engineering and other supporting verticals into a single action plan

• Market or Product Sectors – Identify key aerospace sub-sectors that can be quick wins in new

market sectors or developing new services

• Promote among youth - Conceptual plans to create aspiration value among youth and rest of the citizens to promote aerospace industry through concepts like drone city and talent industry matchmaking portal

• Address key challenges – Identify issues related to incentives, promotion, tax, talent/training,

technology, land rental, regulations and funding for aerospace companies

• Support structure - Propose solutions by recommending a support structure to promote aerospace industry in Selangor by solving identified challenges

• Global best practices – Identify global best practices by learning from advanced aerospace

economies such as UK, USA, Japan, France, and South Korea etc.

• Regional Benchmarking - Provide recommendation on incentive plans from regional benchmarking of Thailand, Indonesia, Philippines and Singapore required to promote existing aerospace companies as well as new companies to take up aerospace business

• Aligned with national aerospace blueprint 2030 - Selangor Aerospace Action plan to be

developed in alignment with Malaysian Aerospace Industry Blueprint 2030 as well as in line with requirements of aerospace companies in Selangor

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER 2.2 Action Plan Concept

In order to ensure that the Action Plan is relevant and pragmatic, a process of co-creation, validation and ratification of measures was undertaken. Workshops and focus group discussions were conducted with aerospace industry participants as well as government regulators and agencies (both state and federal) with a view to get a deeper understanding of the obstacles to the aerospace industry’s development, validate the relevance of measures that have worked in other economies; identify specific interventions, simple and complex, that will help remove developmental barriers; obtain feedback on the details of the Implementation Plan and; to obtain their buy-in for subsequent implementation.

Table 1: Action Plan Workshop process

Sl Session Purpose Attendees

No.

1 2

3 4

5 6

7 8

9 10

Workshop#1

Reviewofkeystakeholders’

Masterplans

Workshop#2 IndustryFeedback

Workshop#3&#4

GovernmentAgencyDiscussions

FocusGroup FGDwithIndustryStakeholders(MRO)

Discussion1

FocusGroup FGDwithIndustryStakeholders

Discussion2 (Manufacturing)

FocusGroup FGDwithIndustryStakeholders(SI,

Discussion3 Engg.&Design)

FocusGroup FGDwithIndustryStakeholders

Discussion4 (Training&Education)

Workshop#5- Reviewandfeedbackfromexecutive

PresentationtoEXCO committee

Workshop#6– PresentationtoSelangorGLC

PresentationtoGLCs Consortium

Workshop#7 Townhallmeeting

MAHB,UMW Aerospaceindustryplayers Stategovernmentagencies,Federal governmentagencies MROPlayersinSelangor

ManufacturingPlayersinSelangor SystemIntegration,Engineering& DesignPlayersinSelangor TrainingandEducationplayersin Selangor

ThecommitteecomposedofSelangor's EXCOandCEOInvestSelangorBerhad YayasanSelangor,PKNS,PNSB,MBI, INPENS

Industryplayersandgovernment agenciesinpresenceofMB,Selangor

Further details about the workshops are mentioned in the Appendix.

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER 2.3 Guiding Principles

The measures and programs identified as part of this Action Plan have been grounded on key economic and policy principles that have shown positive results in other countries. In addition, they have been designed for specific conditions of Malaysian aerospace industry players, and, as such, they can present models for other countries to build on. The issues and concerns shared by players from different segments within the aerospace industry have been addressed by the action plan recommendations. The guiding principles listed below were used for the development of various programs proposed in this report. These guiding principles ensure the effective use of public funds and ensure maximum impact of programs towards the industry’s development. Figure 1: Guiding principles adopted in development of Action Plan

Industryverticals

adressedshouldbe

consistentwiththe

Issuesandchallenges NationalAerospace Theactionplanitems

Blueprint

shouldstemfromlocal

mustdealwitha

industryparticpants

currentindustry

andgovernment

challengesandaimto

agenciesthrough

solvethem

collaborativedialogue

5Dimensions

Involvementofall Theactionplanshould

segmentssuchas

becomposedofaction

privatesector,

itemsbasedonlocal

regulators,agencies

issuesandchallngesas

andanyotherrelated

wellasglobalbest

stakeholdersofthe

practices

aerospaceindustry

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER 2.4 Key Action Plan Segments and Items 2.4.1 Aerospace MRO 2.4.1.1 Current State Assessment The MRO sub-sector in Malaysia boasts the presence of several global names as well as established local players. The major players are primarily based out of Kuala Lumpur International Airport and the Sultan Abdul Aziz Shah Airport at Subang, both of which fall in the state of Selangor. As per the Malaysian Aerospace Blueprint 2030, the goal for Malaysia is to capture 5% of the global MRO market by 20301. Figure 2: Malaysia MRO Industry Value Chain Source: NAICO, Frost & Sullivan Note: The list is indicative and not exhaustive Component, airframe, engine and line MRO activities are supporting the growth in this sector. Major players in the line and airframe maintenance are Malaysia Airlines Engineering, Sepang Aircraft Engineering and Airod while engine MRO space is dominated by OEM such as GE Engine Services. Major companies handling helicopter maintenance and repair are Airbus Helicopters, Leonardo, Global Turbine Asia while some global names in component MRO are SR Technics, RUAG Aviation etc.

1 Malaysia Aerospace Industry Blueprint 2030, MIGHT

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Table 2: Major Aerospace MRO Players in Malaysia Company Location Airframe Line Components Engine Modifications

Malaysia Airlines Sepang, Yes Yes Yes Yes

Engineering Selangor

GE Engine Subang, Yes

Services Malaysia Selangor

Sepang Aircraft KLIA, Yes Yes Yes


Airod Sdn Bhd Subang, Yes Yes Yes Yes Yes

Selangor

Asia Aero Technic Subang, Yes Yes Yes

Selangor

Aerospace Kuantan Yes Yes Yes

Technology

Systems Corp.

MHS Aviation Petaling Yes Yes Yes

Berhad Jaya,

Selangor

Hamilton Klang, Yes

Sundstrand Selangor

Transmile Air Subang, Yes Yes Yes Yes

Services Selangor

Satang Jaya Klang, Yes

Berhad Selangor

Zetro Aerospace Subang, Yes

Selangor

Sapura Aero Sdn Subang, Yes

Bhd Selangor

Advanced Air Shah Alam, Yes

Traffic System Selangor

Honeywell Penang Yes

Aerospace

Parker Hannifin Shah Alam Yes

Sdn Bhd Selangor

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ExecuJet Malaysia Subang, Yes Yes

Selangor

CTRM Aviation Melaka Yes Yes Yes

SME Aviation Sdn Sungai Yes Yes Yes

Bhd Buloh,

Selangor

Pos Aviation Sepang, Yes


Services Sdn Bhd

(PAESSB)

KOP Aviation Sdn Kuala Yes

Bhd Lumpur

Aero Systems Kuala Yes

Aviation Sdn Bhd Lumpur

Aeroclear (Asia) Shah Alam, Yes

Sdn. Bhd Selangor

Hawker Pacific Subang, Yes Yes

Malaysia Selangor

Smooth Route Sdn Subang, Yes Yes

Bhd Selangor

Airbus Helicopters Subang, Yes Yes Yes Yes

Malaysia Selangor

Global Turbine Subang, Yes

Asia Selangor

Leonardo Malaysia Subang, Yes Yes Yes

Selangor

SR Technics Shah Alam, Yes

Malaysia Selangor

Ruag Aviation Subang, Yes

Malaysia Malaysia

Source: Company websites, Frost & Sullivan Note: The list is indicative and not exhaustive

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER Figure 3: Malaysia MRO Industry Capability Breakdown

CapabilityDistributionbyNumberofCompanies

Modifications 10% Airframe

EngineMaintenance Maintenance 5% 22%

Component LineMaintenance

Maintenance 24% 39%

Source: Company websites, Frost & Sullivan Analysis In terms of density of MRO players, the Malaysian aerospace industry is composed of a few players in the high value engine MRO segment, while airframe and line maintenance have substantial presence of airline in-house players such as MAS Engineering as well as OEM backed airframe repair services of Airbus such as Sepang Aircraft Engineering and a large number of small players. In recent years, there has been influx of major global companies in high value component MRO segment such as RUAG aviation and SR Technics while the modification segment has limited presence. Malaysia would benefit further by attracting engine, component and modification players to the ecosystem. Figure 4: Malaysia MRO Industry Revenue Trends

Revenu

einRMBillions

MalaysianMROIndustryRevenueTrends(2010-2017)

8.00

CAGR:4.3%

5.80 6.17

5.80

5.60

6.00 5.30

4.60 5.00

4.90

4.00

2.00

0.00

2010 2011 2012 2013 2014 2015 2016 2017 Source: NAICO, Frost & Sullivan Analysis The activities in aerospace MRO domain are the second biggest contributor to aerospace industry revenue at RM 6.2 billion as of 2017. The growing commercial airline fleet of Malaysia, powered primarily driven by the surge of Low Cost Carriers has helped the overall MRO

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER industry’s growth. The registered growth of MRO revenues in Malaysian MRO sector has been around 4.3% CAGR between 2010-2017.

2.4.1.2 Issues Affecting Aerospace MRO Players (Voice of Industry Players)

Table 3: Issues Affecting Aerospace MRO Players in Malaysia Issue Type Description

Regulations • Aviation parts were exempt from GST, but they are not exempt from SST. This reduces price competitiveness of players in Malaysia. Though circular regarding SST is distributed, the circular does not go into depth. This could lead to financial reporting issues.

• Due to the difference in the regulations between commercial aircraft (regulated under CAAM) and state owned aircraft (regulated by DGTA), MRO vendors need to conform to two different standards of requirements thus increasing the regulatory burden on companies. As the base aircraft may be similar across commercial and state owned aircraft it may be more efficient to have standardization across these segments.

• The lengthy approval process for various certifications (Part 145, 147, 66 etc.) at CAAM is mainly due to its limited resources. CAAM does not have ample personnel with the right skill sets and experience in the aviation and aerospace domain to handle the increasing number of various certifications approval required by the growing industry. Currently its personnel are mostly fresh graduates with limited knowledge and limited understanding of the industry. Furthermore, due to the limited resources, enforcement of regulations and auditing processes is also lacking.

Infrastructure • There is a limited hangar space and other supporting infrastructure for future expansion in Subang.

• Current issues affecting MAS hangars and land issues in Subang resulted in underutilisation of various infrastructures in Subang.

• In addition, Subang is lacking on shared infrastructure for the SMEs. • Airside space available in Subang is inefficiently utilized as per the business needs.

• Some of the existing flying activities could be shifted to a new place and more airside could be made available for business operations to be set-up in Subang.

Education and • Currently Malaysia has plenty of training providers for the industry. Training However, there is a mismatch in the demand from the industry and supply of human capital provided by the training providers and educational institutions. There is lack of quality manpower as per requirement of the aerospace industry. Most candidates interviewed by the MRO companies do not have the required skillsets.

• Since CAAM does not approve EASA licenses, hence students should

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER focus on getting Malaysian (CAAM) certified licenses. Alternatively, CAAM

could look into bilateral safety agreement so that Malaysian licenses are

recognised by other countries and vice versa.

Incentives • Enhanced location specific incentives are required for aerospace

companies if they were to relocate or put new investments in Selangor.

Incentives provided by MIDA have been very helpful for the MRO

subsector. However, more awareness is required as some of the

incentives available are not widely promoted or communicated to the

industry players.

Funding • Specialised incentives targeted for the SMEs to facilitate them in

equipment purchasing, training and upskilling of manpower is currently

lacking.

Other Issues • Large third party or independent MROs are lacking in Malaysia apart from

OEM backed Airbus facility. One stop MRO shops such as AAR, Lufthansa

Technik, EGAT, ST Aerospace, HAECO, SIAEC could be attracted to

develop MRO shops in Selangor cluster so that they can not only bring

their expertise but also retain outgoing MRO revenues as well as bring

additional regional revenue from overseas.

• Another issue that stems up in similar regard is that offset policy has not

been used effectively to attract Airbus or Boeing affiliated MRO shops

while procurement is done by national airlines for new aircraft or engines.

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER 2.4.1.3 Action Plan Items (Solutions to issues in the MRO Industry) In the short-term, waiver of SST on aircraft parts, formation of aerospace skills council, development of an aerospace portal, providing equipment funding for SMEs and location specific enhanced incentives for aerospace parks are the required initiatives. In the medium-term, initiatives being looked at are investment grants to SMEs provided for capital expenditure with a maximum cap, a taskforce set up between MAHB, ISB and Khazanah Nasional to improve infrastructure at Subang, bilateral safety agreements signed by CAAM and EASA / FAA, CAAM’s capacity enhanced and regulations standardised for state owned and private aircraft as well as provision of build-to-suit facilities for aerospace players on long term lease. Other medium term initiatives would be to include development of an offset policy to attract global OEMs to setup MRO shops and using a levy as when MRO services are being procured from overseas for 9M registered aircraft or providing a rebate to operators using MRO services domestically. A long term initiative would be setting up a general aviation airport and Aerospace Park for aircraft tear down and recycling facility as well as relocate some general aviation activity. Such an aerospace park could also house drone / UAV city, aerospace camp etc. to motivate the youth in taking up careers in aerospace. Figure 5: Aerospace MRO Action Items

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER Regulations The regulatory changes needed to enhance the development of the aerospace MRO segment include:

• Standardizing the regulatory requirements for performing MRO activities on privately owned and state owned aircraft is required as there are cases where the base model is the same. Currently, due to the difference in the regulations between commercial aircraft (regulated under CAAM) and state owned aircraft (regulated by DGTA), MRO vendors need to conform to two different standards of requirements thus increasing the regulatory burden on companies.

• CAAM doesn’t have sufficient manpower available to undertake the necessary processes and

approvals. As a result of this, the time taken to grant approvals is quite long. There is a need to enhance CAAM’s capacity to speed up approval processes.

• Aviation parts were exempt from GST, but they are not exempt from SST. This reduces price

competitiveness of players in Malaysia as the material cost incurred to perform an MRO service in Malaysia would be higher than the material cost incurred to deliver the same MRO service package in other countries.

• Signing bilateral aviation safety agreements with the aviation regulator of foreign countries will

help MRO players which already have CAAM certification as they will then be authorised to perform MRO activities on aircraft registered in those foreign jurisdictions such as FAA and EASA without additional certification requirements. This will enable mutual recognition of procedures for the approval and monitoring of aircraft maintenance organisations.

Infrastructure The infrastructure initiatives needed to enhance the development of the aerospace MRO segment include:

• Development of a dedicated general aviation airport and aerospace park so as to allow relocation of general aviation activities from Subang will free up land which can be made available to MRO players that are looking to expand in Subang

• Setting up a task-force of MAHB-ISB-Khazanah Nasional is important to address the pressing

issues in Subang such as congestion on the road leading to the terminal, congestion in car parking space, flooding issues, etc.

• Develop build-to-suit facilities and offer aerospace MRO tenants on long term leasing at low rates

such as 30 years or more where ownership is retained by government throughout the leasing period and assets are transferred back to state authority after lease period or at an earlier instance due to failure of achieving certain KPIs such as number of jobs, revenue targets, profitability, economic value addition etc.

Education and Training The human capital development initiatives needed to support the development of the aerospace MRO segment include:

• The state of Selangor could have a portal where aerospace MRO companies in Selangor can list their job openings and skill requirements. The job seekers trained by the institutes in Selangor

24


can login to the portal and apply for the relevant jobs. It will also help showcase the skills that are currently in demand. Though such a website is available but it needs substantial improvement and promoted across MRO companies.

• The state of Selangor could have an ‘Aerospace Skills Council’, with members from MRO

players, government agencies (CAAM, MOHE, MOHR) and the training organisations. A process of annual or biennial curriculum review and update should be set forth to ensure that the graduates are trained in the skills required by the industry. This will help remove the mismatch between the supply and demand of skills.

Incentives The incentives needed to support the development of the aerospace MRO segment include:

• Aerocluster at Subang and KLIA Aeropolis could be declared as aerospace parks and specialised incentives structures can be developed for the same, over and above what is generally offered by MIDA being location specific in nature for establishments in Selangor. The nature of incentives could be ranging across invest tax allowances, tax rebates / exemptions, double deduction on training expenses etc. The enhanced incentive will draw further investments from the existing MRO players and will also generate interest among potential players looking to set up MRO facilities in Malaysia.

Funding The funding initiatives needed to support the development of the aerospace MRO segment include:

• The state of Selangor can institute a program wherein companies based in Selangor can apply for investment grants. The applications would be evaluated based on the commercial viability of the project and the potential impact on the industry and the economy. As a rule of thumb, the investment funding should have a cap (for example, up to 20% of capital costs for a project may be awarded).

• Selangor can have a provision for providing funding to high-performing SMEs in MRO sector for

the purchase of equipment. SMEs should be asked to submit applications for funding, which would then be evaluated on a case by case basis. The evaluation criteria should include things such as past performance of the SME, the contract value of project for which the equipment is required, the number of new jobs that will be created, etc. The funding can either be in the form of a subsidy or a low interest loan.

Other Solutions The other initiatives that can help in the development of the aerospace MRO segment include:

• The state of Selangor can recommend the Malaysian government to consider setting up a comprehensive offset policy to attract MRO players. Malaysian government can implement an offset policy, wherein offset obligations are part of procurements by state owned airline i.e., Malaysian Airlines. The foreign company can fulfil the offset obligation by setting up an MRO shop in Malaysia when procurement of new aircraft or engines is underway. This will lead to inflow of a share of the expenditure, result in technology transfer to local Malaysia companies,

25


skill development of employees and creation of jobs. Over time, the MRO shop will also cater to the regional industry and lead to higher MRO industry output.

• Alternatively, third party one-stop large MRO companies such as AAR, Luftansa Technik etc. or

OEM backed MRO shops such as those of Airbus and Boeing could be attracted by state owned airline i.e., Malaysia Airlines for setting up joint ventures. A success story that can be attributed in similar light would be setting up of two separate joint ventures between Singapore Airlines and Boeing as well as Airbus for MRO operations in recent years.

• Alternatively, a levy could be charged for 9M registered aircraft for all MRO services that are

being done outside Malaysia or a rebate on taxes applied for performing MRO services within Malaysia.

2.4.2 Aerospace Manufacturing 2.4.2.1 Current State Assessment The aerospace manufacturing sub-sector has been a highly inspirational growth story for Malaysia with significant developments happening over a two-decade period since the first National Blueprint was adopted. The inflexion point for this sub-segment happened when two major foreign investments happened, namely Spirit Aerosystems and Honeywell Aerospace avionics. Malaysia is today home to several global OEMs such as Honeywell, Safran and Spirit Aerosystems. At the same time, domestic companies such as CTRM, UMW Aerospace and UPECA have grown into major players in tier 1 and tier 2 spaces in the aerospace industry value chain. These success stories have helped provide a healthy industry ecosystem and are the inspiration for other local companies to move to the next level. Apart from assisting the major players, Malaysia is also facilitating its own indigenous small and medium enterprises (SME) to establish capabilities at Tier 3 and 4 of the supply chain. Aerostructure manufacturing is expected to continue its growth trend over the next several years because Malaysia is heavily involved in the lucrative narrow-body programmes, which are expected to have extensive sales and deliveries for years to come. This will provide an opportunity for the local players to invest in higher value added products and services to try and move up the value chain.

26

STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER Figure 6: Malaysia Aerospace Manufacturing Value Chain Source: Frost & Sullivan Note: The list is indicative and not exhaustive Figure 7: Malaysia Aerospace Manufacturing Industry Revenue Trends

Revenu

einRMBillions

MalaysianManufacturingIndustryRevenueTrends(2010-2017)

8.00 CAGR:32.9%

6.60

6.40

6.00 5.80

4.00

2.70

4.00 2.38 2.44

0.90

2.00 0.00

2010 2011 2012 2013 2014 2015 2016 2017 Source: NAICO, Frost & Sullivan Analysis The increase in manufacturing output has led to a steady increase in aerospace exports. Though imports still remain high, the exports have grown at a faster rate than imports.

27

STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER Figure 8: Malaysia Aerospace Manufacturing Value Chain

Aerospace Products – Imports, Exports and Trade Balance

10,000

Mill

ion 5,000

0

-5,000

RM

-10,000

in -15,000

-20,000

2011 2012 2013 2014 2015 2016 2017

Imports Exports Trade Balance

Source: Ministry of International Trade and Industry Table 4: Major Aerospace Manufacturing Players in Malaysia

Company Location Airframe Avionic Components

Computer Design & Ground

Equipment Sys & Developme- Equipme

s & Machining

. software nt nt.

Sapura Subang, Yes

Defense Selangor

CTRM Shah

Alam, Yes

Systems

Selangor

Astronautic Shah

Technology Alam, Yes

Sdn Bhd Selangor

SME Sungai

Buloh, Yes Yes

Aerospace

Selangor

CTRM Aero Melaka Yes

Composites

Asian

Composites Kedah Yes

Mfg

Senior Upeca Subang, Yes


UMW Serendah

, Yes

Aerospace

Selangor

Strand Petaling

Aerospace Jaya, Yes

Sdn. Bhd. Selangor

28


Company Location Airframe Avionic Components

Computer Design & Ground

Equipment Sys & Developme- Equipme

s & Machining

.

software nt nt.

Spirit Subang, Yes

Aerosystem Selangor

Honeywell Penang Yes

Aerospace

Safran Negeri

Landing Yes

Sembilan

Systems

Celestica Senai, Yes

Johor

Source: Company websites, Frost & Sullivan

Note: The list is indicative and not exhaustive

Aerospace manufacturing and design is a highly technologically intensive process with a number of steps involved at various levels. Hence, it is inevitable that all participants will need to have high level of technological competence to successfully. As the Malaysian aerospace industry has matured over time, the industry players have invested to develop their capabilities. Table 5: Technology Capabilities of Major Malaysian Aerospace Manufacturing Players

Company Location Mac

hini

ng

Engg

.Des

ign

Engg

.R&D

Pain

ting

Plat

ing

Anod

izin

g N

DT

Wel

ding

Fabr

icatio

n Su

rface

Tr

eatm

ent

Asse

mbl

y/

Sub-A

ssem

bly

Other Capabilities

A&I Dream Melaka Y Y Y

Sdn Bhd

ACM

Holdings Penang Y Y Sheet Metal, Turning

Sdn Bhd

Aerospace

Composites Kedah Y

Malaysia

CNC milling, turning,

lathing, laser cutter

Aerospace and brake press, NC

Partners Johor Y Y Y Y router, surface grinder,

Engineering CMM, band saw and

bending tool,

passivization;

Airfoil Selangor Y Y Recontouring, Thermal

29


Company

Services Sdn Bhd

Location

Mac

hini

ng

Engg

.Des

ign

Engg

.R&D

Pain

ting

Plat

ing

Anod

izin

g ND

T

Wel

ding

Fabr

icatio

n Surfa

ce

Trea

tmen

t As

sem

bly

/ Sub-

Asse

mbly

Other Capabilities

Spray, Diffusion

Coating

Alpha

Precision

Turning & Kedah Y

Engineering

Sdn Bhd

Asahi Aero Selangor Y

Y Y

Malaysia

CTRM Selangor Y Y Y

Turret punching, laser

cut, debur sanding,

Coraza Penang Y

Y Y

Y bending, stamping,

Systems machining, spot

welding, TIG & MIG

welding, clinching

Curge

Advance Selangor Y

Sdn Bhd

G7 Selangor Y

Aerospace

Globus

Solutions Selangor Y

Sdn Bhd

Hicom-Teck Molding, electroplating

See Mfg (M) Selangor Y Y Y

and laser cutting

Sdn Bhd

Honeywell Penang Integrated avionics

Aerospace systems manufacturing

Innopeak Selangor Y Y Y Y Y

Sdn Bhd

Conversion Coating,

Jecmetal Passivation and

Industries Johor Y Y Y Y Y Electro Polishing,

Sdn Bhd Peening and Blasting,

Ultrasonic Cleaning

30



hini

ng En

gg.D

esign

JWR Penang

Technology

Kean Lai

Precision Penang Y

Industry

Kontron Penang

Y

Malaysia

Leader

Technology Selangor

Scientific

Nagoya Plastic

Industry Sdn Kedah

Bhd

Parker Selangor

Aerospace

Professional

Tools & Dies Penang Y

Sdn Bhd

SAM Penang Y

Malaysia

Engg

.R&D

Pain

ting

Plat

ing

Anod

izin

g ND

T

Wel

ding

Fabr

icatio

n Surfa

ce

Trea

tmen

t As

sem

bly

/ Sub-

Asse

mbly

Other Capabilities

Y Y Stamping

CNC Milling, Turning,

Y Y Y Y Grinding, Brazing,

Pneumatic Tapping

Y

Material testing,

Environmental testing,

Metallurgical testing,

Vibrational Testing

Molding, Silk-

Y Y Y screening, Tampo pad

printing, Heat stacking

Automation,

Engineered Materials,

Filtration, Fluid

Connectors,

Hydraulics

- Instrumentation

Y

Molding, Tooling,

Stamping

Y Y

Y

Y

Y

Sanyco Aluminium casting,

Grand

Selangor Y Y Precision machining,

Industries

Testing

Sdn Bhd

Design for

manufacturing. CNC

SDMK Sdn Selangor Y Y

Y process development.

Bhd Precision component

manufacturing. Ground

support jigs & repair

31



hini

ng

Engg

.Des

ign

Engg

.R&D

Pain

ting

Plat

ing

Anod

izin

g N

DT

Wel

ding

Fabr

icatio

n Su

rface

Tr

eatm

ent

Asse

mbl

y/

Sub-A

ssem

bly

Other Capabilities

stations.

Heat treatment, Metal

SME Selangor Y

Y

Y Y Spraying, Laboratory

Aerospace Testing, Calibration

Services

Diffusion Coating,

Spirit Chemical milling,

Aerosystem Selangor Y Y Y Y Y Cleaning, Coating,

s Penetrant processing,

Surface preparation

UMW Selangor Y

Y Y

Y

Aerospace

Heat treatment,

Upeca Selangor

Y

Y Y

electroplating,

Aerotech Metallurgical testing,

Protective treatment

Source: Company Websites, Frost & Sullivan

Machining is the most common capability possessed by companies in Malaysia, followed by painting, welding and engineering design. The graph below gives a snapshot of the capabilities and the number of companies possessing that capability. Figure 9: Most Common Technological Capabilities of Major Malaysian Aerospace Manufacturing Companies

NumberofCompaniesbyTechnologyCapability(Top5)

20 15 10 5 0

Machining Painting Welding Engineering Assembly/Sub- Design assembly

Source: Company Websites, Frost & Sullivan More than half the major aerospace manufacturing players are based out of Selangor, with Penang being the base of a quarter of the companies.

32


Figure 10: Base Locations of Major Malaysian Aerospace Manufacturing Companies

AerospaceManufacturingPlayersbyState

Johor Melaka

3%

7%

Kedah Selangor

10%

53%

Penang

27%

Source: Company Websites, Frost & Sullivan In order to further enhance the aerospace ecosystem, Malaysian companies need to aim for aerospace industry specific certifications such as NADCAP, AS9100 and EN9100.

Figure 11: Summary of Certifications held by Major Malaysian Aerospace Manufacturing Companies

NumberofCertificationHolders

ISO9001

ISO:14000/14001

ISO:TS16949

OHSAS18001

0 5 10 15 20 25


2.4.2.2 Issues Affecting Aerospace Manufacturing Players (Voice of Industry Players)

Table 6: Issues Affecting Aerospace Manufacturing Players in Malaysia Issue Type Description

Regulations • Aviation parts were exempt from GST, but they are not exempt from SST. This reduces price competitiveness of players in Malaysia. Though circular regarding SST has been distributed, the circular does not go into depth. This could lead to financial reporting issues.

• Manufacturing players that already have local certification need additional certifications for parts manufactured by them so that those could be directly installed in aircraft manufactured under those foreign jurisdictions. If local certifications were mutually recognisable between CAAM and EASA or FAA, then local manufacturers could adhere to just one set of regulatory requirements.

33

34

Since aerospace manufacturing is a global ecosystem hence without exposure to global contracts there will not be any growth. A comprehensive offset policy is required for further growth of manufacturing operations where local company can receive technical know-how, exposure to new technology and take part in larger global contracts.

Other Issues •

those required on training and upskilling of existing manpower is requisite for further growth of this sector

• Funding requirements is quite observable for capital expenditure related to equipment purchase in the manufacturing sector.

• Obtaining funding from local banks is a major challenge as most local banks are not well versed of the nature of the industry which results in delays or rejection for financial support. Local banks do not differentiate between the operations of OEMs, MROs and airlines. As a result, if MRO or OEM approach a bank for loan, they are often told that the airlines is not doing well, so overall industry is not doing well too hence it will be difficult for them to provide loans. Even large companies face this problem with banks.

• Contract financing for exports is a bigger challenge as most often the players have to wait for 12-18 months for work to proceed.

Funding

• Certification such as NADCAP requires 12 to 18 months which is a problem for the SMEs. SMEs require assistance in obtaining AS9100 certification. This requires both incentives and mentorship.

• Funding related incentives for the aero manufacturing subsector such as

Incentives

come to Selangor and not bear with high capital expenditure to start operations. The high initial infrastructure cost can be taken off the balance sheet and instead dealt slowly over the time as lease rental fee.

• Enhanced location specific incentives are required for aerospace manufacturing companies if they were to relocate or put new investments in Selangor. Incentives by MIDA are helpful; however they are not location specific. If a particular state is interested to have a higher volume of investments then incentives need to be location specific.

Infrastructure

• Importance should be put on developing the ecosystem rather than attracting new players into the industry. Malaysia currently has limited support from the local supplier eco-system for activities such as machining, processing, welding, etc. The lack of an ecosystem hinders further development for the manufacturing sector.

• Low cost infrastructure options are required such that companies can


Market Access • SMEs require more assistance for market access in reaching out to overseas OEMs. Aerospace export promotion is key to manufacturing since all integrators are aerospace primes are global companies.

STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER 2.4.2.3 Action Plan Items (Solutions to issues in the Manufacturing Industry) In the short-term, waiver of SST on aircraft parts, a certification support program set up for SMEs, enhanced incentives for aerospace parks specific to Selangor for ITA, tax-rebate, exemption etc. and providing equipment funding for SMEs are the required initiatives. In the medium-term, bilateral safety agreements signed, an aerospace industry ecosystem development program instituted, develop build-to-suit aerospace manufacturing facilities, investment grants provided for capital expenditure with fixed cap, export finance support provided and development of an offset policy. The long-term action items include setting up of Selangor export promotion agency that would showcase the capabilities of the SMEs in Selangor. Figure 12: Aerospace Manufacturing Action Items Regulations The regulatory changes needed to enhance the development of the aerospace manufacturing segment include:

• Aviation parts were exempt from GST, but they are not exempt from SST. This reduces price competitiveness of players in Malaysia and increases the cost of production, thereby making products manufactured in Malaysia less competitive as compared to those manufactured elsewhere. Hence it is recommended that SST exemption is applied to aerospace manufacturing.

35


• Signing bilateral aviation safety agreements with the aviation regulator of foreign countries will help manufacturing players which already have CAAM certification as parts manufactured by them can directly be installed in aircraft manufactured under those foreign jurisdictions without additional certification requirements. A similar example would be 2004 U.S-Singapore Bilateral Safety Agreement (BASA) which has benefitted both countries by saving time and reducing costs in aircraft design and manufacturing.

Market Access The market access initiatives needed to support the development of the aerospace manufacturing segment include:

• Invest Selangor, in collaboration with MATRADE can set up a dedicated aerospace export promotion agency, which would liaise with SMEs in Selangor and showcase their capabilities and products at international platforms such as trade shows or export-import missions. Other functions can include country image building through advertising, promotional events, and advocacy, market research and publications, and export support services such as exporter training and information on trade finance, logistics, and customs.

• Invest Selangor can institute a SME support program, wherein established players such as Spirit

Aerosystems, UMW Aerospace and CTRM are incentivised to create linkages between OEMs and SMEs. A percentage share of the contract value can be reimbursed by the government for all successful contracts for a fixed period (eg. 3 years).

Infrastructure The infrastructure initiatives needed to enhance the development of the aerospace manufacturing segment include:

• Develop build-to-suit facilities and offer aerospace manufacturing tenants on long term leasing at low rates such as 30 years or more where ownership is retained by government throughout the leasing period and assets are transferred back to state authority after lease period or at an earlier instance due to failure of achieving certain KPIs such as number of jobs, revenue targets, profitability, economic value addition etc.

Incentives The incentives needed to support the development of the aerospace MRO segment include:

• The state of Selangor can demarcate certain areas within the state specifically for aerospace industry. Companies willing to set up operations in these ‘aerospace parks’ can get special incentives or grants over and above what MIDA already offers to companies in other locations. This will help in the development of a manufacturing ecosystem and cluster.

• The state of Selangor can institute a program to support local companies in obtaining AS9100 certification. The same can be done in collaboration with companies such as Spirit Aerospace and CTRM, which already hold AS9100 certification and are major players in Malaysia’s aerospace manufacturing industry. A thorough shortlisting program should be carried out to identify a list of SMEs who are eligible for mentorship by larger local companies and funding support. Number of companies to be supported would depend on the available budget.

36

STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER Funding The funding initiatives needed to support the development of the aerospace manufacturing segment include:

• The state of Selangor can institute a program wherein companies based in Selangor can apply for investment grants for capital expenditure. The applications would be evaluated based on the commercial viability of the project and the potential impact on the industry and the economy. As a rule of thumb, the investment incentive should have a cap (for example, up to 20% of capital costs for a project may be awarded).

• Selangor can have a provision for providing funding to high-performing SMEs in manufacturing

segment for the purchase of equipment. SMEs should be asked to submit applications for funding, which would then be evaluated on a case by case basis. The evaluation criteria should include things such as past performance of the SME, the contract value of project for which the equipment is required, the number of new jobs that will be created, etc. The funding can either be in the form of a subsidy or a low interest loan.

• The State of Selangor can develop an export finance scheme, wherein the government with

provide a guarantee for bank loans to manufacturers in Malaysia. By backing the loans, the government will give the lending institutions more confidence to provide the loan by sharing the risk burden. This will enable the exporters to get access to affordable loans. Financing support can also be provided to overseas buyers who are purchasing goods manufactured by players in Malaysia above a certain threshold. (eg. USD 5 million).

Other The other initiatives that can help in the development of the aerospace manufacturing segment include:

• The state of Selangor can recommend the Malaysian government to consider setting up a comprehensive offset policy. Malaysian government can implement an offset policy, wherein offset obligations are part of procurements by Malaysian Airlines. The foreign company can fulfil the offset obligation by procuring raw materials or parts manufactured in Malaysia. This will lead to inflow of a share of the expenditure, result in technology transfer to local Malaysia companies, skill development of employees and creation of jobs. Over time, the manufacturing partner will also be able to receive further OEM contracts for other aircraft.

2.4.3 Systems Integration, Engineering and Design Services Players 2.4.3.1 Current State Assessment Malaysia is well established in terms of capability in integrating UAVs, Simulators and Spacecraft. A number of these systems are already deployed and operationally proven in-service. Systems integration will play a key role if Malaysia has to move up the aerospace industry value chain going forward. However the current number and capability remains limited in this segment.

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Figure 13: Systems Integration Key Participants in Malaysia

Source: Frost & Sullivan

The capabilities of the players in this segment vary widely from space systems to unmanned aerial systems to air traffic systems and avionics systems. There is no one specific sub-sector where the players are concentrated.

Table 7: Systems Integration Key Participants in Malaysia

Company Location Key Offerings G7 Aerospace Cyberjaya, Experienced in aircraft systems integration, cost-effective

Selangor solution provider on aircraft system and equipment. Contraves Malaysia Cyberjaya, Systems capabilities include manufacturing of sub-

Selangor assemblies up to complete systems, test and evaluation, delivery and commissioning at customer nominated locations, and service support activities Sapura Secured Kuala Design, develop, integrate, upgrade, (operate and Technologies Lumpur maintain) and supply training and simulation systems. CTRM Systems Shah Avionics system design, integration and commissioning. Integration Alam, Non-avionics computer system design, integration and

Selangor commissioning and network system design, integration and commissioning. Advanced Air Traffic Shah Air Traffic management systems, radio communication Systems Alam, systems, Uninterruptible Power Supply Systems

Selangor Unmanned Systems Shah Unmanned Aerial Systems Technology Sdn Bhd Alam,

Selangor Astronautic Shah Customized Unmanned Aerial System Solution, Satellite Technology Sdn Bhd Alam, communication solutions

Selangor System Consultancy Kuala Command, Control, Communication and Intelligence Services Lumpur (C3I) System Source: Company websites, Frost & Sullivan Note: The list is indicative and not exhaustive

38


Figure 14: Engineering & Design Key Participants in Malaysia Malaysia has a small presence of engineering and design players supporting the aerospace industry. This includes local players as well as global companies who have set up base in Malaysia.

Table 8: Engineering & Design Key Participants in Malaysia Company Location Key Services Offered SDMK Group Shah Alam, Design for manufacturing, Precision component Selangor manufacturing, CNC process development, Turnkey Engineering Development, software solutions Innopeak (M) Sdn Petaling Jaya, Machining and fabrication, inspection, consultancy Bhd Selangor on design and engineering Strand Aerospace Petaling Jaya, 3D CAD Modelling, composite design, Selangor manufacturing consultation and support Mawea Industries Petaling Jaya, Portable Scanning, Coordinate Measurement and Selangor Inspection, surface control, reverse engineering, rapid prototyping, in-line measurement Kean Lai Precision Simpang Ampat, Precision manufacturing, Surface treatment and Industry Penang finishing, 3D SpaceClaim and Solidworks CAD design services Kontron Asia Pacific Perai, Penang Engineering support, RF design, Automated PCB assembly, in-circuit and function testing, turnkey packaging services Aerospace Partners Gelang Patah, Precision machining Engineering Johor


39


Figure 15: Research & Development Key Participants in Malaysia The establishment of Aerospace Malaysia Innovation Center (AMIC) in 2011 was an effort to improve aerospace R&D so that it is industry-led. ATSB, a wholly owned company by the Malaysian government under the Minister of Finance Inc. supervised by Ministry of Science, Technology and Innovation was established with the mandate primarily to develop space and satellite technology. Though some local companies too have invested in R&D, most are still hesitant to invest and as a result of which the country is still dependent on foreign R&D.

Table 9: Research and Development Key Participants in Malaysia

Company Location Research Focus Areas

AMIC Kajang, Selangor Sustainable Aviation – Biomass optimization,

Techno-economy, waste-water to fuel, COE on

biomass valorization

Factory for the Future – Tool design,

VIRISTAM, Spoiler redesign, Advanced

testing, Advanced NDT Techniques

ATSB Shah Alam, Selangor Satellite solar panels, Unmanned Aerial

Systems

CTRM Shah Alam, Selangor Composites R&D

Kontron Asia Pacific Perai, Penang Internet of Things (IoT), Industry 4.0


40

STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER 2.4.3.2 Issues Affecting Systems Integration, Engineering and Design Services Players

(Voice of Industry Players)

Table 10: Issues Affecting Aerospace Industry Systems Integration, Engineering & Design Players

in Malaysia Issue Type Description

Market Access • Additional support is required for companies to do business development

overseas as being present in the vicinity of the OEMs is important for

companies to access the market. Business development is a costly

exercise and local companies need support from the government in

accessing markets and building relationship with global market players.

• In terms of system integration, design and engineering support, the current

ecosystem is under developed. There are only a few players in machining,

fabrication, testing and evaluation segments which forms a supporting

ecosystem for the industry.

Infrastructure • If the state can develop shared testing and engineering facilities with

equipment provided and managed by a company, to develop economy of

scale then it may be worthwhile the investment

Incentives • Companies willing to set up operations in ‘aerospace parks’ should have

•

special incentives that are location specific

When new regulations are imposed by the government (such as

implementation of NADCAP for CMM), SMEs struggle due to lack of

support in obtaining necessary certifications.

Funding • There is a lack of funding and support for the segments such as design

and engineering as well as research and development. Funding providers

expect immediate and high returns on the funding support provided which

turns out to be difficult for the companies in the early stages. As a result,

funds are not available for the companies who need them. Expectations of

immediate returns deter the private funding support. For example, for

engineering services to obtain a USD $1 million project, they start with

projects of smaller value say USD $10,000. Even for such small

opportunities, engineering service companies need to invest a high amount

which will be difficult to be substantiated in terms of returns in short term

but there are strong success stories where the small projects turned out to

be a million-dollar projects in the long term.

• Both large companies and SMEs need to be encouraged to invest in

research activities for further growth of R&D within aerospace.

• A targeted fund for supply chain enhancement will help in development of

infrastructure, processes and talent across the value chain.

Other Issues • Malaysia needs to increase the focus on research and development

activities. A research roadmap needs to be developed since there is no

specific direction of R&D in the aerospace domain.

• A research coordination council is required to prepare, take decisions on

41


the research roadmap and decide upon prioritization of research activities.

• As drone industry is picking up and Malaysia has some capabilities in system integration hence it may be a good option to further explore.

• A comprehensive offset policy would offer local firms a chance to work on

new contracts related to design integration and engineering services and hence increase their technical know-how and exposure to global projects.

2.4.3.3 Action Plan Items (Solutions to issues in the SI, Engineering & Design Industry) In the short-term, enhanced incentives need to be developed for aerospace parks, certification support program for SMEs, providing equipment funding for high performing SMEs, tax credit system for R&D, targeted investments done in R&D, preparation of a research roadmap and formation of a research council, and setting up a drone city are the required initiatives. In the medium-term, shared infrastructure for testing and engineering services, grants provided for capital expenditure and development of an offset policy. The long-term action item includes setting up of Selangor export promotion agency that would showcase the capabilities of the SMEs in Selangor. Figure 16: Aerospace Systems Integration and Engineering & Design Services Action Items Market Access The market access initiatives needed to support the development of the aerospace systems integration and engineering & design segment include:

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• Invest Selangor, in collaboration with MATRADE can set up a dedicated aerospace export promotion agency, which would liaise with SMEs in systems integration, engineering and design domain to showcase their capabilities and products at international platforms such as trade shows or export-import missions. Other functions can include country image building through advertising, promotional events, and advocacy, market research and publications, and export support services such as exporter training and information on trade finance, logistics, and customs.

• Invest Selangor can institute a SME support program for systems integration, engineering and

design players, wherein established players such as Spirit Aerosystems, UMW Aerospace and CTRM are incentivised to work with local SMEs. A percentage share of the contract value can be reimbursed by the government for all successful contracts for a fixed period (eg. 3 years). A thorough shortlisting program should be carried out to identify a list of SMEs who are eligible for mentorship and funding support. Number of companies to be supported would depend on the available budget.

Infrastructure The infrastructure initiatives needed to enhance the development of the aerospace systems integration and engineering & design segment include:

• The state can develop shared testing and engineering facilities with equipment provided and managed by a company, so as to offer services to the industry on pay as you go basis. Besides testing, the facility can have machining and fabrication, inspection, consultancy on design and engineering etc. where economy of scale can be generated from across the industry.

Incentives The incentives needed to enhance the development of the aerospace systems integration and engineering & design segment include:

• The state of Selangor can demarcate certain areas within the state specifically for aerospace industry. Companies willing to set up operations in these ‘aerospace parks’ can get special incentives or grants over and above what MIDA already offers to companies in other locations. This will help in the development of the overall ecosystem and cluster.

• The state of Selangor can institute a program to support local companies in obtaining various

certifications such as NADCAP. The same can be done in collaboration with companies such as Spirit Aerospace and CTRM, which already hold such certifications and are major players in Malaysia’s aerospace manufacturing industry. A thorough shortlisting program should be carried out to identify a list of SMEs who are eligible for mentorship by larger local companies and funding support. Number of companies to be supported would depend on the available budget.

Funding The funding initiatives needed to support the development of the aerospace systems integration and engineering & design segment include:

• There is a lack of funding and support for the segments such as design and engineering as well as research and development. Hence the state of Selangor can institute a program wherein companies based in Selangor can apply for investment grants for capital expenditure. The

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applications would be evaluated based on the commercial viability of the project and the potential impact on the industry and the economy. As a rule of thumb, the investment incentive should have a cap (for example, up to 20% of capital costs for a project may be awarded).

• Selangor can have a provision for providing funding to high-performing SMEs in this segment for

the purchase of equipment. SMEs should be asked to submit applications for funding, which would then be evaluated on a case by case basis. The evaluation criteria should include things such as past performance of the SME, the contract value of project for which the equipment is required, the number of new jobs that will be created, etc. The funding can either be in the form of a subsidy or a low interest loan.

• A R&D tax credit system can be introduced in Malaysia to encourage both large companies and

SMEs to invest in research activities. The degree of credit should be made higher for SMEs as the need is greater for such players. If not at a country level, it can be instituted at a state level wherein the state of Selangor can provide R&D credit.

• The institution of a targeted fund for supply chain enhancement will help in development of

infrastructure, processes and talent across the value chain. One company should be eligible for one grant only. An analysis of the company’s capability and the net economic impact of the grant should be evaluated before allocation. The fund can be focussed on specific sub segments which are in demand and there is a supply side shortage in Malaysia.

Other Issues The other initiatives that can help in the development of the aerospace systems integration and engineering & design segment include:

• Malaysia needs to increase the focus on research and development activities. A research roadmap needs to be developed in collaboration with existing major industry players in Malaysia such as GE Aviation, Spirit Aerosystems, Honeywell, Safran, CTRM, etc. The research should focus on futuristic domains such as advanced manufacturing processes, improvements in MRO processes as well as on other initiatives in systems integration and space systems.

• To make advancements in Research and Development, the state of Selangor needs to setup a

Research Coordination Council. The council should have representatives from the industry, institutions engaged in research and the government. The council will take decisions on the research roadmap and the prioritization of research activities. Disbursement of funds for R&D initiatives can also be done in consultation with the council.

• A drone park can be set up in the state of Selangor. It will generate interest among the

youngsters and make them aware of the exciting aspects of the aviation sector. The usage of UAVs is growing rapidly across the board. Such a park will also provide players engaged in UAV systems development an area for research and testing.

• The state of Selangor can recommend the Malaysian government to consider setting up a

comprehensive offset policy. Malaysian government can implement an offset policy, wherein offset obligations are part of procurements by Malaysian Airlines. The foreign company can fulfil the offset obligation by procuring components or parts manufactured in Malaysia or by setting up MRO centres. The firms working on the offset contracts will in turn require design, integration an engineering services which can be bought from the local players in these segments.

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER 2.4.4 Aerospace Training and Education 2.4.4.1 Current State Assessment More than 30% of the manpower supply in Malaysia’s aerospace industry is provided by The Majlis Amanah Rakyat (MARA - Government entity) through various educational institutions. MARA also provides undergraduate and post-graduate scholarships and loans (local & overseas). Government has taken active role in developing human capital requirement through the following initiatives:

• Malaysian Institute for Aviation Technology (MIAT) (now under University Kuala Lumpur) is responsible in imparting ab-initio training to students in the field of Aircraft Maintenance Engineering where the university is qualified to offer European Aviation Safety Agency (EASA) Part 66 Aircraft Maintenance Engineer License training program in collaboration with a German strategic alliance company

• Malaysian Industry Group for High Technology (MIGHT) is focused to develop human capital for

strategic industry clusters namely automotive and aerospace specifically in the area of Design and Advanced Manufacturing

• LEADER Aerospace Program features a strong partnership with OEMs (Spirit Aerosystems

Malaysia, CTRM and STRAND) and their first tiers to ensure Malaysia has the manpower capability and is ready to meet their requirement and grow organically.

• MARA Aerotech was established to develop aerospace manpower for the the industry. M-

Aerotech is responsible for the Asia Aerospace City’s (AAC) development in Malaysia International Aerospace Centre, Subang.

• Professional development center is one of the divisions under AAC which combines bespoke

academic programs with apprenticeship-like experience through collaboration with members of the industry, to create industry-ready manpower that are at par with international standards.

Training Institutes: As the industry requires specialized skilled and ramp up of existing workers, there are handful dedicated institutes offering training and courses related to aerospace industry. Below table is partial list of training companies operating in Malaysian Aerospace Industry. Table 11: Specifications of Major Malaysian Aerospace Training Institutes

Training Location Industry Specific Courses Accreditation

Institute

Diploma in Aircraft Maintenance Technology with

Admal License Cat A, Diploma in Aviation Business, CAAM CAAM Part

Sepang, Part-66 License Program, Diploma in Ground 147 Approved

Aviation

Selangor Handling, Bachelor programs in aircraft engineering, Training

College

aero engineering, aircraft system and aircraft Organization,

maintenance engineering

Advance Ipoh, Skill Development Aircraft Technician Diploma

Aeronautics (Mechanical), Skill Development Aircraft Technician

Perak

Training Diploma (Avionics), UK CAA Part-66 Modular

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Institute

Centre Course, CAAM Part-66 Modular Course

Allied Petaling Basic Aerodynamics, Basic Avionics, Basic Fitting ATO/2016/01;

Aeronautics Practices, CAAM Part-66 Cat A1 – Practical Training

Jaya, CAAM part 61

Training (workshop & lab) + Theoretical (class room), CAP

Selangor category A1

Center 741 Standard Practices (On Job Training)

APR – Category A & B Licenses, structural repair CAAM,

Shah programme, aircraft mechanic level 1, maintenance Authorized to

Aviation

Alam, technician cat A, maintenance engineer cat B, conduct

Training

Selangor trainee aircraft maintenance engineer, EASA-CAAM CAAM part 66

Center

Part-66 equivalence programme exams

TRTO and

Asian Part 147 by

Aviation Sepang, Aero plane pilot course, aircraft maintenance CAAM;

Center of Selangor engineering course, helicopter pilot course Approved

Excellence training center

for AirAsia

Aviation Shah CAAM

Design

Alam, Type training B1 & B2 and Design & Engineering approved,

Center

Selangor Part 66

Group

Dilog Petaling Aircraft maintenance programme, cat A1, A3, B1.1, CAAM part

Training & Jaya,

B1.3, B2; Human factors, CAAM Air legislation 66/147

Services Selangor

Aircraft type training, basic maintenance, regulatory

Dviation Petaling & organizational training, HRDF approved CAAM and

Training Jaya, training(part 145, part M etc.) , mandatory recurrent EASA

Center Selangor training (fuel tank safety, human factor, safety compliant

management, electric wiring interconnect system)

Elite Opa Shah Airbus helicopter AS 355 B2 (Avionics), B737 CAAM part

Alam,

Sdn Bhd familiarization training 147 approved

Selangor

Commercial Pilot's License and Instrument Rating

HM Langkawi, (Aeroplane) with Frozen Airline Transport Pilot's CAAM

Aerospace Kedah License Course, Abridged Course (CPL/IR (A) with approved

Sdn Bhd Frozen ATPL), Private Pilot's License Course,

Assistant Flight Instructor Course

Koleg

Yayasan Melaka Part 66 Cat A &B CAAM part

Melaka Sdn 147 approved

Bhd

Malaysia Private pilot’s license, commercial pilot’s license, CAAM

Flying Melaka airline transport pilot’s license, assistant flying

Approved

Academy instructor

Malaysian Petaling Regulatory & safety, personal development and CAAM

Airlines Jaya, professional skills, customer service &

Approved

Berhad Selangor communication skills, aircraft type rating courses,

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Institute

Training pilot instructor, safety instructor,

Academy

Malaysian

Aviation Kuantan, Aircraft maintenance engineer, aircraft maintenance CAAM

Training Pahang technician, part 66 cat A1 Approved

Academy

MHS Subang, CAAM

Aviation On job training for aircraft maintenance engineers

Selangor Approved

Berhad

Pusat Shah CAAM

Latihan Alam, Aircraft maintenance engineering technology

Approved

Tinggi Selangor

Universiti Diploma of Engineering Technology programs in

Aeroplane Maintenance, Avionics Maintenance and

Kuala Approved

Helicopter Maintenance

Lumpur Training

Sepang Bachelors programs in Aircraft Engineering

Malaysian Organization

Selangor Technology (Avionics), Aircraft Engineering

Institute of by CAAM &

Technology (Mechanical) and Aviation Management

Aviation EASA

Aircraft Maintenance License Program – EASA Part

Technology

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Bachelor of Aerospace Engineering - Universiti Putra

Malaysia

Bachelor of Engineering (Mechanical-Aeronautics -

Universiti Teknologi Malaysia

Bachelor of Engineering in Aerospace – Universiti

Sains Malaysia

Bachelor of Aeronautical Engineering Technology -

Other Universiti Tun Hussien Onn Malaysia

universities Diploma In Aircraft Maintenance Technology and

Bachelor Of Science In Aviation Management And

Piloting - Management & Science University

MEng Mechanical Engineering Aerospace and MEng

Aeronautics and Astronautics – University of

Southampton

Bachelor of Engineering (Aerospace Engineering) -

International Islamic University of Malaysia


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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER 2.4.4.2 Issues Affecting Aerospace Training and Education Players (Voice of Industry

Players)

Table 12: Issues Affecting Aerospace Training & Education Players in Malaysia

Issue Type Description

Regulations • Currently there is a shortage of maintenance personnel and technicians.

Students and parents are more inclined towards university courses which

are not recognised by CAAM. At the same time, EASA and FAA

certifications are not recognised by CAAM hence students need take up

CAAM certification course in addition to EASA/FAA certifications which is

additional time and cost for the students.

Education and • The education content in relation to the aerospace MRO and

Training manufacturing industry lacks alignment with the industry requirements.

Hence fresh graduates spend ample time in training which is a significant

cost for SMEs

•The current system lacks manpower planning in line with demand for

specific requirement of skills such as those of mechanics and technicians.

Hence an aerospace portal would be useful that could connect employee

and employer.

Infrastructure • Shared training facilities with equipment provided that are accessible to

various institutions and colleges so that practical training can be aided at

common facilities with lower cost burden on training schools and colleges

Incentives • The current practice of having three months internship is insufficient for

students to have a meaningful learning experience. The first three months

of the internship period is only sufficient for students to get familiarized with

the how things work in the industry. There is no incentive support for a

proper internship program.

Funding • Currently there is no funding assistance available for students taking up

CAAM certifications and doing on the job training (OJT). However, funding

for students taking up university degrees, diploma and TVET certifications

are available by PTPTN, MARA, JPA and other agencies although these

courses are not recognised by CAAM.

Others • In order that students are able to take up Research and Development in

aerospace subjects as a career option or to proceed to more high value

added aerospace jobs, a comprehensive R&D roadmap for aerospace is

missing which could guide students towards high value jobs. A career

towards aerospace R&D is almost non-existent.

• The aspiration of taking up aerospace career is low compared to other

desk jobs or other industries.

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER 2.4.4.3 Action Plan Items (Solutions to issues in the Training & Education Industry) In the short-term, development of an aerospace portal, setting up of a drone city, forming an aerospace skills council, providing hiring grants for fresh graduates and providing support for a student internship program are the required initiatives. In the medium-term, a government funded training program needs to be instituted alongside setting up a process of validation of FAA/EASA licenses and local curriculum and certification requirements aligned to EASA/FAA certification and curriculum standards. Figure 17: Aerospace Education and Training Action Items Regulations The regulatory changes needed to enhance the development of the aerospace education and training segment include:

• CAAM could have a procedure to re-certify or validate personnel who have valid FAA and EASA licenses as there are globally recognised. The curriculum and certification requirements for local institutions should also be revised and aligned with the global standards.

Education and Training The human capital development initiatives needed to support the development of the aerospace systems integration and engineering & design segment include:

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• Invest Selangor can set up a fund which will be used to subsidise SMEs. SMEs hiring fresh graduates can claim the subsidy up to a certain portion (eg. 50%) of the graduate’s salary for a fixed period of time (eg. 2 years). Each SME should be eligible to put forward multiple such applications up to a certain limit (eg. 20 per year)

• The state of Selangor can have an ‘Aerospace Skills Council’, with members from the industry

players, government agencies (CAAM, MOHE, MOHR) and the training players. A process of annual or biennial curriculum review and update should be set forth to ensure that the graduates are trained in the skills required by the industry. This will help remove the mismatch between the supply and demand. Guidelines regarding certifications and recognition of other certifications should also be set forth.

• The state of Selangor can have a portal where aerospace systems integration and engineering &

design companies in Selangor can list their job openings and skill requirements. The job seekers trained by the institutes in Selangor can login to the portal and apply for the relevant jobs.

Infrastructure The infrastructure needed to support the development of the education and training segment includes:

• Develop shared training facilities with equipment and assets so as to offer services to the industry for practical training on pay as you use basis so that training institutes can focus on delivery of the curriculum rather than cost pressures of obtaining equipment and aircraft for training purposes.

Incentives The incentives needed to support the development of the education and training segment include:

• The state of Selangor can co-invest in a ‘Student Internship Program’ with local aerospace majors such as Spirit Aerosystems and CTRM for manufacturing and GE Aviation and Sepang Aircraft Engineering for MRO. Students from all aerospace training institutes in Selangor would be eligible and a few students would be selected after a thorough screening process.

Funding The funding initiatives needed to support the development of the education and training segment include:

• The state government of Selangor can set up a training program in collaboration with the several technician training institutes in Selangor. The state can provide funding for a common facility which will be used to train the technicians. The equipment will facilitate hands on training and will therefore ensure that the graduates are well versed with the job requirements. This will enable them to obtain job positions at companies in Malaysia and abroad.

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER Other Issues The other initiatives that can help in the development of the aerospace systems integration and engineering & design segment include:

• To make advancements in Research and Development, the state of Selangor needs to setup a Research Coordination Council. The council should have representatives from the industry, institutions engaged in research and the government. The council will take decisions on the research roadmap and the prioritization of research activities. Disbursement of funds for R&D initiatives can also be done in consultation with the council.

• A drone park could be set up in the state of Selangor. It will generate interest among the

youngsters and make them aware of the exciting aspects of the aviation sector. The usage of UAVs is growing rapidly across the board. Such a park will also provide players engaged in UAV systems development a facility for research and testing.

2.4.5 Other Issues Affecting Multiple Aerospace Verticals This section contains other issues that either impact niche industry segments of the aerospace industry beyond the core segments as defined in the Malasysian Aerospace Blueprint 2030 such as business aviation or common issues pertaining to multiple segments. There are multitude of factors affecting the aerospace business spanning across lack of enforcement and infrastructure to sourcing capability of next generation technologies as well as not having shared testing centers and foreign currency holding issues to name a few.

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Figure 18: Issues Affecting Multiple Aerospace Segments

2.4.5.1 Other Issues Affecting Aerospace Players (Voice of Industry Players)

Table 13: Other Issues Affecting Aerospace Industry Players in Malaysia Issue Type Description

Regulations • For business aviation and general aviation, aircraft registration is a

cumbersome and lengthy. The requirements are unrealistic and not in line

with global standards. Also, financers do not recognise the Malaysian

registry as business aviation friendly. Buying and registering used aircrafts

from third parties is cumbersome over buying the same from OEMs. This

results in aircraft owners preferring to go for foreign registration.

• The import of certain production inputs/raw materials required for the

aerospace industry is restricted by the DOE among many other materials.

These material restrictions are an impediment to the industry's ability to

provide a wider spectrum of services.

• Regulations are not enforced properly in business aviation due to which

illegal activities are prevalent. Compliance is anyway costly and there is no

incentive for it too.

Infrastructure • The road leading to Subang often gets congested leading to issues and

complaints. There’s no clear aerospace park branding of Subang. Only

state government can fix the above.

• Certain areas in Subang are prone to flooding due to drain clogging.

Subang also does not have enough parking space. A multi-level car-park is

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER an immediate need. Subang Aerotech Park and airport facilities are not managed and maintained properly. Dedicated professional management team is required.

• The speed and connectivity of internet is very slow on the apron and the tarmac causing difficulty in use of technology aids in hangars and ground support equipment. Better infrastructure and special tariffs and incentives are required for Aerospace Park.

• The establishment of a centralized location for the aerospace industries will enable companies to achieve greater efficiency through the utilization of shared facilities such as chemical processing plants, moulding facilities, and testing labs.

• Currently SMEs have to send their products for testing to the testing centres in the USA or Europe. This is time consuming and requires significant investment from the SMEs.

Education and • Malaysian universities lack representation from industry experienced Training professionals in top leadership roles • The industry is at present finding it difficult to source for competencies in artificial intelligence and machine learning

• Currently there are two simulator training centres, one in Subang (MAS) and one in Sepang. There’s need for more simulators for training.

Market Access • Local aerospace companies find it difficult to expand their business overseas. They require support, on how to tap overseas market because in the long term, they cannot sustain catering only to local market. The existing efforts of the industry to access global markets is scattered and done by companies individually.

• Local players are not pushed to form alliance with government and foreign investors in terms of co-investment and technology transfer

Others • R&D and Innovation is involved with high risks and appropriate funding support from government will minimize the risks associated thereby resulting in improved return on investment (RoI).

• The industry is of the perception that the research carried out by R&D institutions lacks relevance to the industry. This stems from a lack of consultation of R&D institutions with the industry.

• For companies who deal with foreign suppliers and customers, it is useful to retain foreign currency but current regulations, force conversion of a very high percentage of foreign currency received. So businesses have to convert back when they need to pay in foreign currency. It leads to high exchange losses.

• Lack of political interventions, leadership and appropriate monitoring mechanisms lead to repetition of mistakes resulting in failed offset programmes

‒ No proper implementation of offsets ‒ Lacks appropriate documentation and guidelines ‒ No proper evaluation of offset programmes

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‒ No focus on continuous development of existing offsets

‒ Lacks focus on association with development of technology and training capabilities

• Products developed in aerospace sector lacks support from government in terms of product commercialization. Also co-development programs between industry and government are not existent

2.4.5.2 Action Plan Items (Solutions to issues in the Industry) The short-term initiatives include development of a taskforce between MAHB and ISB for Subang infrastructure improvement, ensuring proper enforcement of policies restricting the movement of foreign registered aircraft, setting up an aerospace skills council, coming up with a market development program, setting up a research council and set up of a drone city. The medium-term initiatives include re-designing the BA/GA aircraft registration process, removing import restrictions on production inputs, developing enhanced incentives for aerospace parks, providing grant for R&D and giving tax credit for R&D investment. The long-term initiatives would be development of a general aviation airport, a comprehensive offset policy framework and setting up of Selangor Export promotion Agency. Figure 19: Other Action Items

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER Regulations The other regulatory changes required are:

• Ease the registration process and requirements for BA/GA aircraft. Adopt regulations in line with best practices of established BA/GA registries such as those in Aruba, Cayman Islands, Bermuda, etc.

• Liaise with Department of Environment (DoE) to ease restrictions on production inputs/raw

materials required by the aerospace industry

• Facilitate discussion on regulations enforcement framework with CAAM, such as the regulations restricting movement of foreign registered aircraft

Infrastructure Other infrastructure initiatives needed to support the development of the industry include:

• Development of a dedicated general aviation airport and relocation of existing flying clubs and flying schools from Sultan Abdul Aziz Shah airport to a new airport. It will free up slots for movement of commercial and business aviation aircraft. General aviation airport or Aerospace Park could include activities such as aircraft tear-down and recycling facility etc.

• Setting up a task-force of MAHB, ISB and Khazanah Nasional is important to address the

pressing issues in Subang including infrastructure improvement and .development, and maintenance and management of the facilities.

Education and Training The human capital development initiatives needed to support the industry include:

• The state of Selangor can have an ‘Aerospace Skills Council’, with members from the industry players, government agencies (CAAM, MOHE, MOHR) and the training players which can address various issues such as lack representation from industry professionals in leadership roles at the institutes. The council could also address challenges by coordinating with industry in identifying upcoming technologies such as artificial intelligence and machine learning that could be leveraged in training and education segments and thereby include in the curriculum. It can also address issues related to hardware and equipment such as simulators and advise on the need for more simulator training players in specific locations depending upon demand and supply gap.

Market Access The market access initiatives needed to support the development of the industry include:

• Invest Selangor, in collaboration with MATRADE can set up a dedicated aerospace export promotion agency, which would liaise with SMEs in Selangor and showcase their capabilities and products at international platforms such as trade shows or export-import missions. Other functions can include country image building through advertising, promotional events, and advocacy, market research and publications, and export support services such as exporter training and information on trade finance, logistics, and customs.

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• Invest Selangor can institute an SME support program, wherein established players such as Spirit Aerosystems, UMW Aerospace and CTRM are incentivised to work with local SMEs. A percentage share of the contract value can be reimbursed by the government for all successful contracts for a fixed period (eg. 3 years).

Other

The other initiatives that can help in the development of the industry include:

• To make advancements in Research and Development, the state of Selangor needs to setup a

Research Co-ordination Council. The council should have representatives from the industry, institutions engaged in research and the government. The council will take decisions on the research roadmap and the prioritization of research activities. Disbursement of funds for R&D initiatives can also be done in consultation with the council.

• A drone park can be set up in the state of Selangor. It will generate interest among the

youngsters and make them aware of the exciting aspects of the aviation sector. The usage of UAVs is growing rapidly across the board. Such a park will also provide players engaged in UAV systems development an area for research and testing.

• The state of Selangor can recommend the Malaysian government to consider setting up a

comprehensive offset policy. Malaysian government can implement an offset policy, wherein offset obligations are part of procurements by Malaysian Airlines. The foreign company can fulfil the offset obligation by procuring components or parts manufactured in Malaysia or by setting up MRO centers. The firms working on the offset contracts will in turn require design, integration an engineering services which can be bought from the local players in these segments.

2.5 Action Plan Items (High Impact Programs) – Best Practices

2.5.1 Summary of Action Plan Items

Table 14: List of Action Plan Items and Segments Impacted

Segments Impacted ► SI,

Aerospace Aerospace Engg. Training & Respon-

Action Items ▼ MRO Manufacturing & Education sibility

Design

1. SST waiver for aircraft parts √ √ Federal

2. Standardization of regulations for √

Federal

private and state-owned aircraft

3. CAAM capacity enhancement for √

Federal

speedier approval

4. Bilateral Aviation Safety √

Federal

Agreements for MRO

5. Aerospace park and general √

State

aviation city with aircraft tear-down etc.

6. MAHB-ISB-Khazanah taskforce for √

State

Subang infrastructure improvement

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7. Develop build-to-suit facilities to

offer tenants on long term leasing at √ √ State

low rates

8. Aerospace talent portal for job

search and employee-employer √ √ State

matching

9. Selangor Aerospace Skills Council √

√ State

to be formed

10. Enhanced incentives for

aerospace parks specific to Selangor √ √ √ State

(FTZ etc.)

11. Investment grant for capital √ √ √

State

expenditure with fixed cap

12. Equipment purchase funding for √ √ √

State

high performing SMEs

13. Offset policy to attract OEM / √ √ √

Federal

global MRO companies to setup shops

14. Levy on 9M registered aircraft for

using MRO services outside √ Federal

Malaysia/rebate

15. BASA in manufacturing to reduce √

Federal

approval needs

16. Selangor Export Promotion

Agency to be formed to showcase √ √ State

SME capabilities

17. Aerospace industry ecosystem

development through linkages with √ √ State

local companies

18. Certification Support program for

SMEs including mentorship and √ √ State

incentives

19. Export finance support for

companies in Selangor by providing √ State

loan guarantee

20. Develop shared testing and √

State

engineering facilities to offer services

21. R&D tax credit system to invest √

Federal

into research activities

22. Targeted fund for supply chain √

State

enhancement for specific segments

23. Research roadmap to be

developed in collaboration with √ √ State

industry players

24. Research coordination council to √

State

prioritize research activities

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25. A drone park to promote among √ √ State

youth and research activities

26. CAAM could have a procedure to

re-certify or re-validate EASA / FAA √ Federal

certifications

27. Local certification requirements

need to be updated to EASA/FAA √ Federal

standards

28. Hiring fresh graduates to be √ State

subsidized for SMEs up to a few years

29. State can co-invest in a ‘Student

Internship Program’ with local √ State

aerospace majors

30. Training program in collaboration

with the several technician training

institutes at shared training facilities √ State

with equipment and assets to serve

the industry

2.5.2 Action Item – Case Studies

2.5.2.1 Regulatory Changes

Case Study 1: Approved Import GST Suspension Scheme, Singapore

The Approved Import GST Suspension Scheme (AISS)2 is designed to alleviate the cash flow of businesses in the aerospace industry. The businesses are:

• International airlines

• Players in the Maintenance, Repair and Overhaul (MRO) industry

• Original Equipment Manufacturers (OEM)

• Distributors of qualifying aircraft parts

Case Study 2: Aruba Aircraft Registry

The registry, which was established in 19953, offers a boutique service approach to registration of private and corporate jets. The Registry of Aruba’s latest aircraft registration management system this allows users not only to access their aircraft records, but also permits them to track

2 https://www.iras.gov.sg/irashome/Schemes/GST/Approved-Import-GST-Suspension-Scheme--AISS-/ 3 https://www.ainonline.com/aviation-news/business-aviation/2017-05-22/aruba-registry-touts-benefits-aircraft-owners

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER the registration process, submit application forms online, and live chat with the registry's experts, among other enhancements. 2.5.2.2 Bilateral Aviation Safety Agreements Case Study: Mutual Recognition of Maintenance Standards between Singapore and Partner Countries Singapore mutually recognises the maintenance standards of MRO companies4 in partner countries through the Technical Arrangement in Maintenance (TA-M). With the TA-M, maintenance work on a Singapore registered aircraft, or components to be fitted on a Singapore registered aircraft may be performed in partner countries while still complying with CAAS’ regulations. The TA-M is in lieu of the SAR-145 Maintenance Organisation Approval, which the MRO companies in these partner countries would have been required to hold previously. Similarly, MRO companies in Singapore may also leverage on such TA-Ms to perform maintenance work on aeronautical products from other countries without the need to hold the relevant maintenance organisation approval from the other TA-M partner countries. Some of the states with whom Singapore has Technical Arrangement in Maintenance are Australia, Canada, USA and Hong Kong. The agreement with USA also extends to aerospace manufacturing, wherein aerospace components manufacturing in a facility certified by CAAS can be installed on aircraft manufactured in the US without any re-certification. 2.5.2.3 Certification Support Program for SMEs Case Study: Mexico As part of National Strategic Program of the Aerospace Industry in Mexico5, FEMIA (The Mexican Federation for the Aerospace Industry) with the support of Mexican Government and ProMexico helped released a project by the Mexico-E.U. Competitiveness and Innovation Program (PROCEI), where they helped local suppliers to obtain AS9100 certifications. Companies are selected on the basis of recommendations from OEMs and Tier 1 suppliers. The government offers mentorship to these companies and also provides funding support up to 70% of the total cost of obtaining the certification. 4 https://www.caas.gov.sg/operations-safety/aircraft/maintenance-repair-overhaul 5 http://www.madeinmexicoinc.com/as9100-certifications-for-local-mexican-companies/

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER The state of Chihuahua in Mexico6 has a Fablab (flexible manufacturing laboratory) which allows local SMEs to carry out innovation, design and development activities for new products. The state also has an Advanced Materials Research Center (CIMAV), which will give accreditation in thirteen different material tests, allowing parts to receive NADCAP certification and subsequently penetrate the aviation market.

2.5.2.4 Investment Grants

Case Study: Australia

The Government awards Strategic Investment Incentive7 grants to companies for major projects deemed commercially viable and internationally mobile. Applications are considered on a case by case basis and grants are awarded to capture large scale projects for Australia. For example: Strategic Investment Incentive grant of UAD 12.5 million was given to Hawker de Havilland to assist it win a contract to supply the moveable trailing edge of the 787 ‘Dreamliner’ passenger jet for Boeing. As a result, 220 high technology jobs were created and it also resulted in additional flow-on work for other companies in the industry. The total value of the project was estimated to be around AUD 4 billion.

2.5.2.5 Offset Policy Development

Table 15: Global Examples of Offset Policy Country Offset Sector Minimum Contract Offset Amount as Type of Offset

Value for Offset Policy % of Contract Size

India Civilian and Military USD 70 million 30% Direct and

Indirect

Israel Civilian and Military USD 100,000 35% Direct and

Indirect

Kuwait Civilian and Military USD 3 million 30% Direct and

Indirect

Denmark Civilian and Military USD 3.8 billion 100% Direct and

Indirect

Canada Civilian and Military USD 100 million Not specified Direct and

Indirect

Australia Civilian and Military USD 5 million Maximized where Direct and

Indirect

cost effective

6 https://www.promexico.mx/documentos/mapas-de-ruta/plan-nacional-vuelo.pdf 7 https://www.airtn.eu/wp-content/uploads/australian-government-initiatives-in-the-aeros.pdf

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER Case Study: India India introduced the offset policy in 20058 which makes 30% offset of the total contract size mandatory for all government procurements above USD 70 million. The policy has been applicable for aircraft purchases by Air India, the government owned National Carrier of India. Air India has purchased 68 aircraft from Boeing for a total value of USD 7.7 billion, which corresponds to an offset amount of USD 2 billion. Air India also purchased 43 aircraft from Airbus for a total value of USD 2.8 billion, resulting in offset obligations of USD 700 million. 2.5.2.6 Export Finance Support Case Study: United Kingdom Export Finance UK Export Finance (UKEF)9 is the UK’s export credit agency. It helps UK companies by providing insurance to exporters and guarantees to banks to share the risks of providing export finance. In addition, it can make loans to overseas buyers of goods and services from the UK. UKEF is the operating name of the Export Credits Guarantee Department (ECGD). It provides loans to buyers of UK goods and services and guarantees, insurance and reinsurance against loss, taking into account the government’s international policies. The facilities provided include Bond Support Scheme, Bond Insurance Policy, Export working capital scheme, Letter of credit guarantee scheme, direct lending facility and buyer credit facility. 2.5.2.7 Equipment Purchase Funding for SMEs Case Study: Quebec SME grant, Canada The government of Canada made a $2.2 million10 investment in the form of repayable contributions to 6 aerospace industry SMEs in Quebec for the purchase of high-technology state-of-the-art equipment. 2.5.2.8 Aerospace Park Development Case Study: Aerospace/aviation parks in China Four aerospace parks have been developed such as Beijing Tianzhu Airport Economic Development Zone (EDZ), Xi’an National Aerospace Industrial Base, Tianjin Airport Industrial Park, Shanghai Pudong Airport Industrial Zone (IZ). There are extra incentives for businesses operating within these parks as compared to those outside. 8 https://www.lucintel.com/LucintelBrief/AerospaceOffsetOpportunityinIndia.pdf 9 https://www.britishaviationgroup.co.uk/dit/uk-export-finance/ 10 https://www.newswire.ca/news-releases/funding-for-six-quebec-smes-linked-to-the-aerospace-industry-629397033.html

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER Case Study: Aircraft tear down and recycling facility in Alice Springs, Australia An aircraft storage facility can cater to short, medium and long term storage needs for the airline industry. The facility at Alice Springs, Australia provides for an alternative to airline customers for aircraft operating in the region. Other prominent aircraft storage and recycling facilities are in Europe and USA so airlines have no other option but to ferry their aircraft at their own expense to the western hemisphere. Case Study: Aircraft tear down and recycling facility in Europe TARMAC AEROSAVE is the biggest aircraft storage company in Europe, which is also an EASA and FAA Part. 145 MRO company dedicated to aircraft storage, aircraft maintenance, aircraft recycling and CFM56 engine recycling. The company based in France and Spain has recycled more than 100 aircraft in the last 10 years. It is a joint venture between Airbus, Safran and Suez. The company provides aircraft owners and operators parking space for more than 300 aircraft in Europe and can accommodate all types of aircraft from regionals to A380. Various services provided are aircraft recycling, engine recycling, aircraft storage, aircraft maintenance, part-out and end of life solutions. 2.5.2.9 Aerospace Industry Market Development Initiative Case Study: Aerospace Supplier Development Incentive Scheme, South Africa The scheme is meant to use current local integrators11 – or manufacturers that have already established international market relationships and supply chains – to help develop SME manufacturers, where the integrator acts as a facilitator between the OEM and SME. The incentive payments, which are made to an OEM, are based on a percentage of the increase in contractual value that results from contracts placed by an integrator to an SME. The incentive support continues for three consecutive years, after which the SME is expected to be able to absorb the necessary quality processes and develop independent capability. Two aerospace OEMs -Denel Aerostructures and Aerosud Aviation –had initiated eight projects at seven aerospace manufacturing SMEs in 2015-16. 11 http://aisi.csir.co.za/aerospace-support-programme-success-leads-to-increased-funding-for-supplier-development/

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER 2.5.2.10 Selangor Export Promotion Agency Case Study: Japan External Trade Organization (JETRO) Focusing on three priority areas of machinery and parts (one of which is aircraft parts)12, JETRO presents Japanese products and services at large exhibitions around the world and invites prospective buyers to Japan, to facilitate business ties between Japanese companies and potential partners from overseas. As part of a Regional Industry Tie-Up program, JETRO supports business networking and meetings between industry clusters of Japanese SMEs and those from overseas regions, aiming to facilitate export, technological partnership and joint development of products. 2.5.2.11 Investment in Research and Development Program Case Study: Singapore’s A*STAR Aerospace Programme A*STAR13 undertakes research and development to enhance the aviation industry in Singapore. The programme aims to:

• Improve cost efficiency of research through collaborative pre-competitive research

• Enable member companies to gain synergy through collaborative research

• Enhance competitiveness of members and Singapore’s aviation industry The members of the A*STAR programme include aircraft OEMs Airbus, Boeing and Bombardier, Engine OEMs Rolls Royce and Pratt & Whitney, as well as parts and component manufacturers such as Honeywell, Safran and Spirit Aerosystems. 2.5.2.12 Tax Credit for Research & Development Case Study 1 : R&D relief in UK Government provides R&D tax credits for aerospace manufacturing companies and SMEs in particular. SMEs qualify for expenditure based tax incentive of 230%14 super deduction. Loss-making companies can in certain circumstances surrender their losses in return for a payable tax credit. Unused benefits can be carried forward to utilize in future periods. 12 https://www.jetro.go.jp/en/jetro/activities/business.html 13 https://www.a-star.edu.sg/aerospace/Home 14 http://www.hmrc.gov.uk/gds/cird/attachments/rdsimpleguide.pdf

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER Case Study 2: R&D and innovation credit In Netherlands Companies performing particular R&D activities may benefit from a 32%15 tax credit (up to 40% for start-ups) of the first EUR 350,000 in R&D wage costs and other R&D expenses and investments, and 146% for those costs and investments exceeding EUR 350,000. Innovation Credit is a risk-bearing loan from the government, intended for the development phase of a technically new product, process or service. Funding may vary from 25% (large companies) to 45% (SMEs) of relevant project costs with a maximum of EUR 10 million, and the remainder being financed by the company’s own resources. 2.5.2.13 Research Co-ordination Council Case Study: CORAC, France CORAC is the national council for research in civil aviation. Under the chairmanship of the Minister in charge of Transport16, CORAC gathers all French stakeholders in Civil Aeronautics and Air Transport. It is a national forum to better coordinate and optimise aeronautic research efforts to foster aviation technology breakthroughs and innovations. Sustainable development is at the heart of the CORAC approach. The approach is based on large consultations, exchanges, knowledge sharing and transparency. CORAC has enabled France to develop strong capabilities in the areas of design and engineering; More than 14% of revenue is invested in R&D annually. 2.5.2.14 Aerospace Supply Chain Enhancement Fund Case Study: Advanced Manufacturing Supply Chain Initiative, UK The aim of the advanced manufacturing supply chain17 fund is to improve the growth, quality and global competitiveness of the UK advanced manufacturing supply chain and anchor high value work in England. Successful applicants for the AMSCI receive a grant or loan to existing supply chains to grow, or to encourage new suppliers to establish operations. The scheme is structured in two different funding streams. Stream one is a national scheme organised in different funding rounds covering England and all advanced manufacturing sectors with a particular focus on Automotive and Aerospace sectors. The total fund for stream one is 15 https://investinholland.com/incentives-and-taxes/rd-incentives/ 16 https://www.airtn.eu/wp-content/uploads/2016/01/1h1.pdf 17 https://ec.europa.eu/growth/tools-databases/regional-innovation-monitor/support-measure/advanced-manufacturing-supply-chain-initiative, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/47282 8/BIS-15-557-AMSCI-scoping-report.pdf

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER GBP 320 million. Stream two is a GBP 25 million fund covering applicants based in the four LEP areas (Black Country, Coventry & Warwickshire, Greater Birmingham and Solihull and Liverpool City Region), operating as part of the automotive and aerospace supply chain. The grant covers part of the cost of undertaking one/all of the following:

• Purchase of capital equipment

• R&D that improves manufacturing equipment, systems or processes

• Specific training and skills development to support a project proposal The selection process has two stages – a technical appraisal and an economic appraisal (net benefit vs cost to public sector) 2.5.2.15 Aerospace Skills Council Case Study: UAE Strata Manufacturing PJSC (Strata), an advanced composite aero-structures manufacturing facility, has signed a mutual collaboration agreement with the University Leadership Council, the leading non-profit organization engaged in human capital enhancement in the UAE. The agreement created an opportunity to foster joint educational and capacity building initiatives, bringing together the country’s top universities in an ongoing dialogue between academia, the public sector, and industry. The agreement focuses on developing an informed generation of aerospace talent in the Middle East region, positioning the aerospace sector as a preferred career choice amongst young talent, and raising awareness about the UAE’s achievements in technology and innovation. 2.5.2.16 Student Internship Program Case Study: UAE’s Student Cooperative Agreement With support from Abu Dhabi Education Council, ADEC, Mubadala and BAE Systems18 have partnered on the internship programme until 2020. Each year, five full-time undergraduate engineering students will be selected to attend an intensive 18 week programme at BAE Systems' Military Air and Information business in England.

18 https://www.mubadala.com/en/news/support-abu-dhabi-education-council-mubadala-and-bae-systems-sign-cooperative-agreement-develop

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER 2.5.2.17 Government Funded Training Program Case Study: TESDA aircraft maintenance training in Philippines In 200919, the Technical Educational Skills Development Authority (TESDA) introduces a technical vocational course in aircraft maintenance, conducted by aviation company Aerotechnik Services and the Mechatronics Robotics Society of the Philippines. The program started with 250 students under full scholarship for the 720-hour training program. The training facility is equipped with complete facilities for sheet metal structure repair as well as an actual fuselage of a DC-9 jet aircraft to be used as a training model. Students are also trained to repair commercial planes such as B747, L1011, B777, B737, MD-90, MD-11, Airbus-300 and Airbus 330. Around 80% of the course hours is hands-on training. 2.5.2.18 Hiring Grants for SMEs Case Study 1: Industrial Research Assistance Program, Canada SMEs receive a financial contribution geared towards supporting a portion of the salary costs of a youth candidate20, who will work on technical opportunities within the firm and on non-technical but technology-related projects such as:

• research and development, engineering, and multimedia;

• development of new products and processes;

• market analysis for a new technology-based product;

• business development related to science and technology activities; and

• improvement of customer services, etc. Case Study 2: EDB, Singapore Economic Development Board (EDB) Singapore’s ‘Training Grant for Company’21 encourages manpower capability development in applying new technologies, industrial skills and professional know-how through the support of training programmes for companies’ employees. 19 https://www.philstar.com/other-sections/the-good-news/2009/05/17/468221/tesda-aircraft-training-center-takes-flight 20 https://www.nrc-cnrc.gc.ca/eng/irap/services/youth_initiatives.html 21 https://www.edb.gov.sg/en/how-we-help/incentives-and-schemes.html

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER 2.5.2.19 Aerospace Talent Portal Case Study: Careers in Aerospace, United Kingdom The Careers in Aerospace22 website is hosted by Royal Aeronautical Society and ADS Group. The website aims to showcase what the industry has to offer in order to attract and retain the best talent now and in the future. The website is independent and impartial, providing a complete view of aerospace and aviation pathways and related areas, such as defense and space. Key features:

• There is a ‘Careers Resources’ section which guides those seeking employment in the industry. Guidance includes advice on soft skills, CVs and covering letters, online application forms, interviews and assessment centers.

• The ‘Self-Assessment Portal’ provides free aptitude tests for engineering, flying, apprentices and

flight analyst roles. There are also downloadable listings featuring aerospace and aviation employers by sector, undergraduate and postgraduate courses and useful links.

• The free ‘Careers Directory’ provides all-year round information about the huge variety of

employers, training providers and outreach organizations linked to aerospace and aviation. Featured employers include the likes of Airbus Group, Safran and Leonardo. 2.5.2.20 Drone City Concept Case Study 1: Hangang Drone Park, Seoul, South Korea Opened on June 25 2016, he Hangang Drone Park is located in the eastern district of Gangdong-gu. The park offers an ideal space for people to enjoy flying their quadcopters, and can use the runway to fly model airplanes. The park hosted the 51st Seoul National Skills Competition, with entrants of all ages flying drones through an obstacle course in the park. Citizens are able to freely fly their unmanned aerial vehicles (UAV) that are up to 12 kilograms in weight under an altitude of 150 meters at the park The city allocated some 27,000 square meters to the newly created park after engaging in multiple talks on safety issues with related government organizations, including the transport ministry and the country's military. An information center at the park guides citizens on utilization and safety issues regarding the operation of UAVs.

22 https://www.careersinaerospace.com/

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER Those willing to use the park need to make a reservation online or offline on a first-come-first-served basis. The city government regulates the number of drones flying at the same time to fewer than 30 for safety reasons. Users can fly drones free for up to three hours. The park is open from 8 a.m. to 4 p.m. The site also includes a drone racing area and "pilots' lounge" The 2018 Han River Drone Festival was organized in the month of April at this park. The festival’s events included drone racing competitions, drone airshows and professional lectures on drone operations. Case Study 2: Virginia Tech Drone Park, Virginia USA In April 2018, Virginia Tech University inaugurated a football-field-sized facility which, at 85-feet high, is the tallest Drone Park in the United States. The park, intended primarily for student and faculty use, offers an unfettered environment for research, testing, education, and recreation without the constraints of registration, certification, or specialized training. Inside the park, drone flights are not governed by the strict Federal Aviation Administration regulations and all that is needed is a safety briefing and free time on the park’s calendar. Though primarily meant for students and faculty, third party and commercial operators too are allowed. They need to provide proof of an FAA Remote Pilot certification or 333 exemptions and obtain written authorization from the UAS Safety Office. Additionally, each operator will need to provide proof of insurance. An application has to be submitted for prior approval before one can operate the drone. 2.5.2.21 General Aviation City A dedicated general aviation airfield on government land in Selangor, such as Bernam Jaya, will help in further development of the state of Selangor’s aviation infrastructure. Some of the key components to be included would be: • Relocation of flying clubs, flying schools and training institutes from Subang airport that currently cause congestion at Subang and at the same time relocating to an alternate location will provide enough scope for flying clubs and schools to operate in a non-congested airspace. General aviation flying currently suffers at Subang since the airport is facing constraints due to increase in volume of passengers using the airport to connect to domestic as well as regional destinations. Subang airport is also used by multiple agencies such as TUDM. PULPAK, BOMBA etc. apart from regular airline turbo-propeller operations apart from business jet operators. Due to higher priority given to all the aforementioned, flying clubs and general aviation has taken a back seat which has potential of growth in Malaysia.

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER • Aircraft teardown facilities need large warehouse and processing areas which cannot be accommodated at busy airports such as Subang and KLIA 1&2 hence a separate location is necessary if such activities are to be promoted in the state, moreover it does not involve flying activity so proposing it at a busy airport is not judicious use of airside land. Such aircraft tear down facility can also provide reasonable volume of employment to local community. Since it is a labour intensive activity hence Malaysian labour rates would work out well. An output of aircraft teardown is also refurbishment of aircraft parts and materials that can be re-processed and reused hence necessary processing and storage facilities need to be provided which can be supported well by local logistics players. • A shared hangar with older aircraft for training purposes can be used by all education and training institutes. Staying close to flying schools and flying clubs has synergistic advantages whereby some of the common facilities can be shared as well as provide secondary income streams to certain businesses. Overall a General Aviation (GA) city will promote flying among Malaysian youths and inspire students to take up aerospace related profession in future.

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3 Current Involvement of State and Federal Agencies in

Aerospace Industry 3.1 Ministry of Transport (MOT)

The Ministry of Transport is responsible for the formulation and implementation of policies, strategies and programs for public transportation which covers land, aviation and maritime sectors. These will ensure better services in providing an efficient, safe and effective transportation system towards strengthening multimodal transportation as well as enhancing the country’s competitiveness. Vision

• Spearheading the transformation of an integrated, efficient and safe transportation system Mission

• Strengthening the transportation system driven by technology as a catalyst for national

development Aviation Division23

The Aviation Division is a division within the Ministry of Transport Malaysia. This division is responsible for all civil aviation affairs in Malaysia and is made up of six (6) units as follow:

• Air transport

• Airport services

• Hubbing and aerospace industry

• Licensing and regional cooperation

• Rural air services

• Safety and convention Objectives

• To develop an efficient, economical and safe air transport system for passengers and cargo

• To plan and implement infrastructural projects to meet the demands of the air transport industry 23 Ministry of Transportation

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER 3.2 Civil Aviation Authority of Malaysia (CAAM)

CAAM is an agency under the Ministry of Transport Malaysia. It was formerly known as Department of Civil Aviation Malaysia (DCA). Vision

• To be the world’s leading aviation authority Mission

• To continuously enhance safety, security and efficiency for a sustainable aviation industry Client’s Charter24 (All items are guaranteed subject to the submission of complete documents)

• To process the application for approval of the Air Service License (ASL) and Air Service Permit (ASP) within 6 months

• To process the application for approval of Obstacle Lights and Installation Obstacle Lights within

21 working days

• To process the application for approval of Firework, Hot Air Balloon and Para Jump within 10 working days

• To process the approval of Dangerous Goods Permit within 3 working days

• To respond enquiry/feedback/suggestion about CAAM within 15 working days

CAAM consists of ten sectors and divisions as below.

• Airworthiness

• Air Traffic Management

• Flight Operations

• Airport Standards

• Air Transport

• Air Traffic Inspectorate

• Aviation Security

• Malaysia Aviation Academy

• Management Services

• Legal Advisor 24 Civil Aviation Authority of Malaysia

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER 3.3 The Malaysian Aviation Commission (MAVCOM)

The Malaysian Aviation Commission (MAVCOM) was formally established on 1 March 2016 under the Malaysian Aviation Commission Act 2015 as an independent entity to regulate economic and commercial matters related to civil aviation in Malaysia. The goal is to promote a commercially viable, consumer-oriented and resilient civil aviation industry which supports the nation’s economic growth. The functions, as laid out in the Act, include to:25

• regulate economic matters relating to the civil aviation industry;

• provide a mechanism for protection of consumers;

• provide a mechanism for dispute resolution between aviation industry players;

• administer and manage air traffic rights; and

• advise the Government, administer and manage routes under public service obligations. Figure 20: The role of MAVCOM, MOT and CAAM

Source: Malaysian Aviation Commission The role of MAVCOM differs from those of the Ministry of Transport (MOT) and the Civil Aviation Authority of Malaysia (CAAM). The MOT is responsible for industry policy-making and government-to-government discussions (including to spearhead bilateral or multilateral negotiations on traffic rights), while the CAAM shall continue to regulate technical and safety matters for Malaysia’s civil aviation industry. Mission

• To promote a commercially viable, consumer-oriented and resilient aviation industry, which supports the nation’s economic growth.

25 Malaysian Aviation Commission

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER Vision

• Integrity: Adhere to the highest level of ethics in all that we do.

• Professionalism: Carry out our responsibilities in a professional manner always.

• Impartiality: Independent and impartial in the execution of our duties. MAVCOM is responsible for the regulation of economic and commercial matters within the civil aviation industry. Its responsibilities include the issuance of Air Services Licenses (ASL) for journeys with a fixed schedule, such as for timetabled commercial flights and Air Service Permits (ASP) for non-scheduled services, such as for chartered flights. The Commission also issues out Aerodrome Operator Licenses (AOL) for airport operators and Ground Handling Licenses (GHL) to those who wish to carry out ground handling services in Malaysia. Its responsibilities also cover the administration and allocation of air traffic rights to airlines based on the available capacity of each route and the approval of schedule filing. MAVCOM is also empowered to administer and manage public service obligation routes. In Malaysia, the principal example is the Rural Air Services which connect remote, sparsely populated, or otherwise inaccessible parts of Malaysia with the rest of the country. 3.4 The Malaysian Industry-Government Group for High Technology

(MIGHT)

MIGHT was established on 22 February 1993 as the technology think-tank under the purview of the Prime Minister’s Department. It is governed by a Board of Directors, helmed through the joint-chairmanship of prominent private sector personality and the Science Advisor to the Prime Minister. MIGHT’s emphasis is on market intelligence initiatives using the foresight practices and methodology to identify technology and business opportunities. MIGHT is built on the strength of public-private partnership with members representing both local and international organizations. Mission26

• To serve the nation in advancing competency in high technology through partnership towards sustainable development.

MIGHT was the leader in the development of the First Malaysia Aerospace Industry Blueprint in 1997 and the Second Malaysia Aerospace Industry Blueprint, launched in 2015, better known as Blueprint 2030. Blueprint 2030 aims to capture five per cent of the global maintenance-repair-overhaul market share, while striving to make Malaysia the number one manufacturer of parts and components in Southeast Asia. 26 MIGHT

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER 3.5 National Aerospace Industry Coordinating Office (NAICO)

NAICO has been established in August 2015 as a Unit under the Ministry of International Trade and Industry (MITI). The primary objective of NAICO is to oversee the implementation of the strategies and initiatives in the Malaysian Aerospace Industry Blueprint 2030. NAICO will serve as the focal point in linking the aerospace industry players, relevant Government ministries and agencies, and academia to collectively work together in strengthening the capability and capacity of Malaysia’s aerospace industry. Five industry-led Technical Working Groups for the five Focus Areas under the Malaysian Aerospace Blueprint 2030 have been established under NAICO as a platform for the industry to channel views and input on the development of the industry, share issues and challenges as well as recommend potential solutions. The five Focus Areas are:27

• Maintenance, Repair and Overhaul (MRO)

• Aero Manufacturing

• System Integration

• Engineering and Design

• Training and Education 3.6 Malaysian Investment Development Authority (MIDA)

MIDA is the government's principal agency for the promotion of the manufacturing and services sectors in Malaysia. Vision28

• The best partner to investors distinguished by the integrity and professionalism of its people Mission

• To ensure Malaysia achieves its goal in economic transformation and its aspiration of a developed nation by 2020

MIDA assists companies which intend to invest in the manufacturing and services sectors, as well as facilitates the implementation of their projects. The wide range of services provided by MIDA includes providing information on the opportunities for investments, as well as facilitating companies which are looking for joint venture partners. 27 NAICO 28 MIDA

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER MIDA also evaluates the following applications for projects in the manufacturing and its related services sectors:

• Manufacturing licenses

• Tax incentives

• Expatriate posts

• Duty exemptions on raw materials and components

• Duty exemptions on machinery and equipment for agricultural sector and selected services sector Under the aerospace sector, to further encourage growth and development in this field, MIDA offers attractive tax incentives to companies undertaking activities covering maintenance, repair and overhaul (MRO), manufacturing and system integration for the aerospace industry. MIDA also has identified surface engineering is among the areas that have much potential to enable Malaysia’s transformation towards churning out complex and diverse products for the aerospace industry. Surface engineering processes are overseen by the National Aerospace and Defense Contractors Accreditation Program (NADCAP), administered by the USA-based Performance Review Institute (PRI). Through PRI, NADCAP provides independent certification of manufacturing processes for the industry, and represents a standardized approach to quality assurance. While Malaysia already has companies that are able to offer NADCAP-certified coating and specialty secondary processes, MIDA believes that there is still much room for growth in this area.

3.7 Malaysia External Trade Development Corporation (MATRADE)

MATRADE’s vision is to positioning Malaysia as a globally competitive trading nation by promoting Malaysia’s enterprises to the world. MATRADE’s mission is to develop and promote Malaysia’s export to the world and its functions are:29

• To promote, assist and develop Malaysia’s external trade with particular emphasis on the export of manufactured and semi-manufactured products and, on a selective basis, imports;

• To formulate and implement a national export marketing strategy to promote the export of

manufactured and semi-manufactured products;

• To undertake commercial intelligence and market research and create a comprehensive database of information for the improvement and development of trade;

• To organize training programs to improve the international marketing skills of the Malaysian

exporters;

• To enhance and protect Malaysia’s international trade interests abroad; 29 MATRADE

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• To represent Malaysia in any international forum in respect of any matter relating to trade;

• To develop, promote, facilitate and assist in service areas related to trade; and

• To advise the Government on matters affecting or in any way connected with trade and to act as the agent of the Government or for any person, body or organization on such matters.

MATRADE’s objectives are:

• To raise the profile of Malaysian exporters in foreign markets;

• To disseminate timely and relevant information and market intelligence to help Malaysian companies gain a competitive edge in foreign markets;

• To introduce Malaysian companies to foreign importers seeking Malaysian suppliers; and

• To undertake activities to promote the export of Malaysian goods and services in overseas

markets. MATRADE is also actively involved in assisting foreign companies to source for suppliers of Malaysian products and services, and is represented worldwide at more than 40 locations in major commercial cities. In Malaysia, MATRADE has five local branches in Penang, Terengganu, Johor, Sabah, and Sarawak. The recent initiative for the Malaysian aerospace industry includes organizing its signature program Export Acceleration Mission (EAM) in conjunction with the Farnborough International Airshow (FIA) 2018 in the United Kingdom. The EAM aims to explore any collaboration opportunities for the Malaysian companies with Original Equipment Manufacturers (OEM) and Tier 1 & Tier 2 suppliers in the aerospace manufacturing, engineering services, precision parts, components as well as Maintenance, Repair and Overhaul (MRO) services from around the globe. Held from 16 – 20 July 2018, the initiative is an embodiment of the public-private synergy in accelerating the trade of Malaysian products and services in the aerospace industry. The participation is the country’s third involvement in the FIA and among the collaborators involved are National Aerospace Industry Coordinating Office (NAICO), Malaysia Airports Holdings Berhad (MAHB), Aerospace Malaysia Innovation Centre (AMIC), UMW Group and Invest Selangor Berhad. Seventeen aerospace companies in various pocket of the aerospace industry represent Malaysia in the mission. 3.8 Malaysia Aerospace Industry Association (MAIA)

MAIA is an industry association for the commercial aerospace sector in Malaysia. It was launched in March 2016 by the Minister of International Trade and Industry of Malaysia and approved by the Registrar of Societies to operate in September 2016. It is a platform for Malaysian aerospace industry players to tackle common interests such as growth and industrial development, promotion of the Malaysian aerospace industry and government policy feedback.

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER Recently MAIA has signed a Memorandum of Understanding (MOU) with the Aerospace Industries Association of The Philippines (AiAP), focusing on aerospace industry development at the Defense Services Asia (DSA) 2018, at MITEC, Kuala Lumpur, on 16 April 2018. Both Associations will collaborate to develop aerospace capabilities and business opportunities between Malaysia and Philippines. The MOU will focus on human capital development, research & technology as well as exchange of information on business environment, and international trade issues. The signing of the MoU is part of MAIA effort to secure footprint in the regional OEM supply chain growth. The various OEM internationalization strategies have caused supply chains to pivot towards the high growth regions such as Asia Pacific. MAIA aims to position Malaysia as a capable and competitive manufacturing, MRO and services base able to supplement and integrate with the Philippines and regional aerospace sectors. The MoU signing is part of MATRADE’s continuous effort to match-make MAIA with aerospace associations from other part of the world to further grow the Malaysian aerospace sector.

77


4 Implementation Considerations 4.1 Governance Structure for implementation

The apex of the monitoring mechanism would be NAICO which would have the final say in making any course corrections to the action plan. Invest Selangor would act as the programme management office for the Selangor Aerospace Action Plan and will work in conjunction with other ministries and agencies through the process outlined earlier. This governance structure is pictorially represented in the figure below. Figure 21: Action Plan Governance Structure

NAICO, the council that oversees the country’s aerospace industry, and Invest Selangor, the programme manager of the action plan will be involved in implementation of all the action items. In addition, other relevant state and federal government agencies will need to be involved as and when required.

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER 4.2 Consolidated Action Plan Figure 22: Consolidated Action Plan

79


5 Appendices 5.1 Progress Update

The project timeline depicted below, suggests that the project is estimated to be completed by March 2019. Shown below is the pictorial representation of the project timeline.

Table 16: Project Timeline

Activities

Timeline (Key Dates)

Project kickoff with client

Workshop #1 (Key stakeholders)

Workshop #2 (Industry Feedback)

Workshop #3 (FGD with State Govt.)

Workshop #4 (FGD with Federal Govt.)

FGD with Industry Stakeholders (MRO)

FGD with Industry Stakeholders (Manufacturing)

FGD with Industry Stakeholders (SI and Eng.)

FGD with Industry Stakeholders (Training & Edu)

Workshop #5 (Presentation to Selangor EXCO)

Workshop #6 (Presentation to GLCs)

Workshop #7 (Town hall presentation) Report Submissions and Presentations

Inception Report Submission

Interim Report Submission

Interim Report Presentation

Draft Final Report Submission

Final Report Submission

*Presentation to Selangor Aerospace Council

Aug

Aug

Sep

Sep

Oct

O

ct

Nov

N

ov

Nov

D

ec

Dec

D

ec

Dec

Ja

n Ja

n Ja

n Fe

b M

ar

th

rd

th

th

th

rd

th

th th

th

th

th

th

nd

th

th

th

th

9 2 3 4 7 1 2 2 3 1 4 1 6 2 8 7 1 0 1 9 2 6 2 8 3 0 2 5 1 5

* Handled by Invest Selangor Berhad Legend:

Completed Tasks

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER 5.2 Workshop 1 – Developer (UMW and MAHB) 5.2.1 Session with UMW

Date: 23rd August 2018 Time: 9.00am to 12.00pm Location: Invest Selangor List of Attendees

i. Jamie Haniff Ramlee, Invest Selangor Berhad ii. Liyana Mohd Kamil, Invest Selangor Berhad iii. Khairil Ahmad, Manager Marketing & Sales, Property Development, UMW Development

iv. Siti Fatimah Ishak, Executive, Marketing & Sales, Property Development, UMW

Development v. Barry Lim, Frost & Sullivan vi. Saranya Sundaram, Frost & Sullivan

vii. Shadiza Basirdin, Frost & Sullivan viii. Nishant Dey, Frost & Sullivan

ix. Iskandar Johari, Frost & Sullivan Insights from UMW Voice of UMW on their ongoing and future expansion plans Current and near term plans related to Aerospace projects

• UMW High Value Manufacturing (HVM) Park in Serendah, Selangor is

targeting aerospace, medical, rail and automotive industry • The total land area for the park is 861 acres and divided into two zones, southern

zone and northern zone • Currently UMW is targeting to develop the southern zone of 200 acres • There will be a UMW cluster where UMW Aerospace and UMW Centre of

Excellence will be located • Recently 3 companies that involve in gas, steel and advanced manufacturing

has agreed to invest in the park • UMW plans to collaborate with MARA and GMI to develop customised

training programs to meet talent requirement from investors Longer term plans

81


• UMW plans to develop the northern zone of the park which is approximately 661 acres

• Future development for the northern zone includes commercial area, industrial area and innovation park

Corporate Strategies

1) Aerospace Segments

• Aerospace is one of the targeted industries for the UMW High Value Manufacturing (HVM) Park in Serendah, Selangor

• UMW Aerospace has signed a 25 + 5 year agreement with Rolls-Royce Plc. to manufacture and assemble fan cases for Rolls-Royce Trent 1000 and Trent 7000 aero engines, which power the Boeing 787 Dreamliner and Airbus A330 neo aircrafts.

2) Infrastructure

• Currently developing the Southern Zone, 200 acres of land with basic

infrastructure. This will take place in the next 5 years • The business model is to sell land and build factory for the targeted HVM companies • 24 acres of land in the Southern Zone has been utilised. It is being occupied by

UMW Aerospace

3) Investments and financing • All investments and financing are mainly sourced from UMW Group

4) Manpower requirement

• UMW is collaborating with MARA and GMI to provide bespoke training programmes

for investors • UMW plans to set up several training centres in the UMW HVM Park to cater to the

specific needs of investors

5) Marketing and promotional activities

• UMW is actively involved with trade missions, aerospace exhibitions, international medical and manufacturing fairs to introduce, promote and explore business opportunities for the UMW HVM Park

6) Socio-economic benefits

• Talent development and creation of employment opportunities • Expected to generate cumulative exports worth RM185 billion by 2046 • Other contribution include advancement of the regional value chain for HVM

and supporting the national agenda in HVM

82


7) Issues and challenges Infrastructure Manpower Financing Others

• Ensuring the park is ready and able for investors to

move/expand/relocate • Talent is a major concern for potential investors • Required to build infrastructure and connectivity • Challenges to bring in first tier companies to Serendah • Saturated industry • Lack of ecosystem eg. established township, commercial and

recreational areas

8) Current support from Government (Federal, State, Local) (Incentives, Investments approval, Subsidies, etc.)

• Maintain close relationship with Invest Selangor, MIDA, MATRADE and MITI

9) Wish list for future support from Invest Selangor and other Government Agencies

Federal

• Customised tax incentives for aerospace players located in

Serendah eg. free trade zone

State Council

• Require speedy approval for water and electricity supply to the

park from SYABAS and TNB • Require speedy approval for the proposed road link to the

highway from MDHS and JKR • Require speedy approval from Bomba for building structure

5.2.2 Session with MAHB

Date: 23rd August 2018 Time: 2.00pm to 5.00pm Location: Invest Selangor List of Attendees:

i. Jamie Haniff Ramlee, Invest Selangor Berhad ii. Liyana Mohd Kamil, Invest Selangor Berhad

83


iii. Randhill Singh, MAHB iv. Woon Sue Ling, MAHB

v. Saravana Kumar, MAHB vi. Aravindthan Raman, MAHB

vii. Clarence Chee, MAHB viii. Barry Lim, Frost & Sullivan ix. Saranya Sundaram, Frost & Sullivan

x. Shadiza Basirdin, Frost & Sullivan xi. Nishant Dey, Frost & Sullivan xii. Iskandar Johari, Frost & Sullivan

Insights from MAHB Voice of MAHB on their ongoing and future expansion plans Current and near term plans related to Aerospace projects (5-10 years)

• Immediate plan and focus for the next 5-10 years is Regeneration of Subang

• MAHB plans to clean up MRO in Subang airport and redevelop the BA (business aviation) MRO in Subang airport. All development will be built-to-suit facility

• Industry segment target are MRO centres up to level 3 for helicopter and ATR,

aerospace high technology

• Looking into developing a one stop centre for co-working space for international and local sales representatives in Subang

• MAHB has signed MoU with Invest Selangor Berhad, MIDA and MARA for human

capital solutions

• Recently MAHB is collaborating with MIDA to establish a working group with various ministries and it is led by MIDA

• MAHB is also in discussion to collaborate with MITI on their Industry 4.0 Masterplan

Longer term plan (>10 years)

• KLIA Aeropolis is a longer term development plan

• Require assistance in financing for infrastructure development

• Promoting the available 17 acre plot for new MRO players

• Need support from government to further develop ASZ2 plot at KLIA2 as ASZ1 is almost fully occupied

Corporate Strategies

84


1) Aerospace Segments

• MAHB vision for Subang Airport Regeneration initiative includes the City Airport, Business Aviation Hub and Aerospace Ecosystem

• For KLIA Aeropolis, the initiative includes MRO and manufacturing hub

2) Infrastructure

• Subang Aero-tech Park is a greenfield development of almost 60 acres • The development model to be followed is that MAHB will develop build-to-suit

facilities for interested parties with 12-15 months of deal signing • KLIA Aeropolis has over 1,000 acres dedicated for aerospace development.

Almost 3,000 acres of strategic reserve is available for further expansion • In KLIA’s Aeronautical Support Zone 1, about 13 acres of land is available

for expansion of MRO facilities • KLIA’s Aeronautical Support Zone 2 has a lot area of 555 acres for MRO activity • Further, 261 acres of developable area is available in KLIA Aeropolis for an

aerospace park

3) Investments and financing

• Funding sources for the development of common infrastructure will potentially be from private investors and institutional investors

4) Manpower requirements

• UniKL MIAT-MARA is a dedicated training institution in Subang that is focusing on

aerospace training and human capital development. This institution is working closely with the industry players in Subang

5) Marketing and promotional activities

• MAHB is actively involved with trade missions and aerospace exhibitions

internationally to attract investors • Looking into developing a one stop centre for co-working space for international

and local sales representatives in Subang

6) Socio-economic benefits

• By 2022, Subang aerospace cluster will generate more than RM3 billion in economic outputs and support more than 50,000 jobs throughout various levels of the economy

7) Issues and challenges

Infrastructure

• Road congestion in Subang causes delays to airport users,

people who are working in the area and emergency response

• Connectivity in Subang eg. KTM, Smart Selangor bus etc. is

currently not integrated and causing difficulty to the users

Manpower • To bring in new talent

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER Financing

• Incentives required for the end developer

Others • Customs issues on MRO parts coming in for repair and

sending it back to international customers

• Overlapping of roles of various agencies at state and federal levels

• To bring in new technologies

8) Current support from Government (Federal, State, Local) (Incentives, Investments

approval, Subsidies, etc.)

• MAHB is working closely with various government agencies such as MOT, MOF, MITI, MATRADE, MIDA, MDEC, Invest Selangor and MARA to catalyse the KLIA Aeropolis and Subang development plans.

9) Wish list for future support from Invest Selangor and other Government Agencies

• MAHB requires a few key issues to be addressed, as these are important enablers

for Subang Aerospace Ecosystem:

i. Infrastructure upgrade and improvement § Traffic congestion

§ Physical aesthetics (eg. bus stop, landscaping, seed bumps etc.)

§ Road maintenance and uplift

§ KTM halt nearby Subang Aerotech Park

ii. Incentives and facilitation § Incentives for aerospace companies tailored for Subang Aerotech Park

§ One stop centre at Skypark for promotional activities, meeting and co-working space

iii. Ecosystem development

§ Surrounding development to be zoned Aerospace and Aviation to support the Subang aerospace ecosystem

§ MAS hangars 2,3,4 preferred to be dedicated MRO activities

iv. Safety and security § Joint committee for surveillance

§ Dedicated police station within vicinity

v. Others § Facilitation with regards to land zoning

§ PNSB land issue

§ Prioritized processing for development submissions

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER 5.3 Workshop 2 – Industry players

Date: 4th September 2018

Time: 9.00am to 5.00pm

Venue: The Saujana Hotel Kuala Lumpur, Shah Alam, Selangor Darul Ehsan, 40150

List of Attendees:

Table 17: Workshop 2 attendees

Company Name

1 Abdullah Chan & Co Datin Shelina Binti Razaly Wahi

2 Add Power Aviation Miguel Ah-Yam Lau Hiu Hoong

3 Advanced Air Traffic Systems (M) Sdn Bhd Almalik Faizal bin Samali

4 Advanced Air Traffic Systems (M) Sdn Bhd Shahurin Abdul Halim

5 Aeroclear Sdn Bhd Dato Zafran

6 Aeroclear Sdn Bhd Kol. Zulkifli Hj. Harun

7 Aerofoil Services Sdn Bhd Wim Van Beers

8 Aerotree Defence & Services SB Zamri Yeop Zainon

9 Aerotrends Aviation (M) Sdn Bhd Michelle Mooi Ying Han

10 AgustaWestland Malaysia Sdn Bhd Nasir Ramly

11 Allied Aeronautics Training Centre Sinnapar Perumal

12 Allied Aeronautics Training Centre Vickneswaran Shanmugam

13 AMIC Liew Kan-Ern

14 APR-Aviation Training Centre Sdn Bhd Amira Amirudin

15 APR-Aviation Training Centre Sdn Bhd Amira Norkhalidah Amirudin

16 APR-Aviation Training Centre Sdn Bhd Mohd Afandi Ghazali

17 APR-Aviation Training Centre Sdn Bhd Nor Hidayah Idris

18 Asahi Aero Malaysia Sdn Bhd Lee Meng Hui

19 Asia Aerotechnic Sdn Bhd Mohd Faiz Mat Daud

20 Asia Aerotechnic Sdn Bhd Tan Wee Liam

21 Astronautic Technology (M) Sdn Bhd Ir. Norhizam Hamzah

22 BAE Systems International Ltd Lt Col (Rtd) Azhar Bin Mohamad

23 Choppertech Services Sdn Bhd Robin Chin

24 Dviation Group Abd Rashid Sharif

25 Dviation Group Alan Tan

26 Dviation Group Razali Idris

27 Dviation Group Shankar Sivalingam

28 Dviation Group Trixie Guantero

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER 29 Dviation Group Ahmad Firdaus Dahalan

30 ESSOR Aerospace Agnes Yeow-Fournier

31 ExecuJet Malaysia Sdn. Bhd. Ivan Lim

32 GE Engine Services Malaysia Sdn. Bhd. Suresh Kumar Shunmugam

33 GIFAS Simon Graber

34 Global Turbine Asia Johan

35 Innopeak (M) Sdn Bhd Suzanna Shahari

36 MAHB Kamarulnizam

37 MAHB Woon Sue Lin

38 Malaysia Aerospace Industry Association Syukran Idris

39 Malaysia Airlines Berhad Kamarudin B Kamilin

40 Malaysia Airlines Berhad Muhammad Hilmi bin Mokhtar

41 MAS Kargo Sdn Bhd Che Adenan Che Wan

42 MIGHT Ahmad Razif Sulaiman

43 MIGHT Datuk Yusoff Sulaiman

44 MIGHT Zeti Tajudin

45 Mind Algorithm Sdn. Bhd. Mahathir bin Azmi

46 Mitsui & Co. (Malaysia) Sdn. Bhd. Englay Ong

47 Mitsui & Co. (Malaysia) Sdn. Bhd. Koji Katsuyama 48 Mitsui & Co.(Malaysia) Sdn Bhd Steven Lim

49 My Land Training & Services Sdn. Bhd. Hajah Rosnah Binti Mohd Deris

50 My Land Training & Services Sdn. Bhd. Haji Ruslin Bin Abdul Karim

51 NADI Ahmad Fuzli Fuad

52 NADI Dato' Abdul Rahim Abdul Raham

53 NADI Goh Boon San

54 NADI Shahril Kadir

55 Nash Aerostar Services Sdn.Bhd A.Naga

56 Nash Aerostar Services Sdn.Bhd Vik.M

57 Panglima Power Sdn Bhd Muhamad Amer

58 Sanyco Grand Industries Sdn Bhd Ho Harn Ping

59 Sapura Aero Sdn Bhd Ilyas Alex Chan Abdullah

60 Sapura Aero Sdn Bhd Noor Ashikin Binti Ismail

61 Sapura Aero Sdn Bhd Elham Farhan Alias

62 Sapura Industrial Berhad Fareza Fazidi Fazi

63 Segi Astana Sdn Bhd Joshua Wong Wai Seng

64 Selangor Human Development Centre Izham Zakaria

65 Selangor Human Development Centre TehEng Guan

66 Sepang Aircraft Engineering Abdul Hadi Ammar Ramzan

67 Skypark Link Sdn Bhd Tan Sri Ravindran Menon

68 Skypark Sdn Bhd Raghbir Singh Bhall

88

STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER 69 SR Technics Malaysia Sdn Bhd Jenny Chan Lee Ping

70 StandardAero Danishwar Lau Hiu Hoong

71 Star Tulip Aviation Sdn Bhd Azhan bin Osman

72 Star Tulip Aviation Sdn Bhd Mohd Iqbal Salleh

73 Star Tulip Aviation Sdn Bhd Mohd Noor Azam Nasir

74 Strand Aerospace Ahmad Shahrilamin

75 Strand Aerospace Hafez

76 Subang Skypark Sdn Bhd Nyanasekaran A/L Valaithan

77 Systematic Aviation Services Sdn Bhd Ismail Asha'ari

78 Systematic Aviation Services Sdn Bhd Zulkifli Mohd Yusof

79 Tri Aero Sdn Bhd Nurul Zulkifli

80 UMW Corporation Sdn Bhd Afifi Raswan Dean

81 UMW Development Sdn Bhd Eric

82 UMW Development Sdn Bhd Khairil

83 UMW Development Sdn Bhd Lynn

84 UMW Development Sdn Bhd Mohamad Azili Samad

85 University of Nottingham Andy Chan

86 University of Nottingham Lim Chin Seong

87 ZRST Aviation Training Sdn Bhd Azali bin Hj Taib 88 ZRST Aviation Training Sdn Bhd Hj Zaiful Hasmi bin Hj Hashim

This workshop was a platform for the industry to voice out their issues covering seven key enablers namely regulation, incentives, funding, infrastructure, market access, talent and R&D & innovation.

The seminar event brought insights from various industry stakeholders, including Malaysia Airports, aerospace companies from manufacturing and MRO, representatives from training institutes and other key government agencies such as NAICO and MIGHT.

89

STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER Summary In total, 55 entities from various fields within aviation industry attended the event while total numbers of attendees was at 88. MRO entities had the highest representation, followed by training, infrastructure and manufacturing. Figure 23: Industry Workshop Attendees Profile

IndustryAssociation Infrastructure Manufacturing

14% 5% MRO

2% 26%

Engineering 2%

BA/MRO 4%

Others BusinessAviation

17% 9% Training 21%

Source: Frost & Sullivan Feedback from our attendees: Three breakout sessions were conducted covering seven topics namely regulations, incentives, funding, infrastructure, talent, market access and innovation, R&D. Particpants were divided in 8 groups of 10 attendees each. Each group was asked to rate the severity of issue amongst the seven discussion topics stated above. Issues that need immediate attention would be regulations and market access. Infrastructure and incentives are important areas for the industry and they are medium priority whereas innovation, R&D and funding are not major concerns. Though ratings given by audience was within a narrow band yet some areas such as regulatory, market access and infrastructure clearly stood out. Figure 24: Industry Workshop Issue Scoring

(in o

rder

of p

rior

ity)

aero

spac

e K

ey

Issu

es a

ffec

ting

Regulations Market Access

Infrastructure Incentives

Innovation & R&D Talent

Funding

1.90 2.00 2.10 2.20 2.30 2.40 2.50 2.60

Intensity of Issues (Aggregate avg. scoring) Source: Frost & Sullivan No. of agencies = 55, no. of respondents = 88

90

STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER 5.4 Workshop 3 & 4: Federal and state agencies

Date: 23rd October 2018



List of attendees:

Table 18: Workshop 3 attendees

Agency Name

1 UPEN Waheeda Bt Md Hussain 2 Jabatan Alam Sekitar Negeri Selangor Hedzir Bin Zakaria 3 Jabatan Pengairan Dan Saliran Negeri Tuan Ir Haji Azmi Bin Ibrahim Selangor 4 MAIA Dato Zulkarnain 5 MAIA Syukran Idris 6 Majlis Bandaraya Shah Alam Tuan Haji Hamzah B Tajuddin 7 Majlis Daerah Hulu Selangor Encik Shahreza 8 Malaysian Investment Development Mohd Faridz Akram B Mokhtar Authority (MIDA) 9 Malaysian Investment Development Syazri Hidayat Bin Abd Shukor Authority (MIDA) 10 MARA Dato Azhar Abdul Manaf 11 MATRADE Yuslinawati Mohd Yusof 12 MATRADE Azman Yusuf 13 MATRADE Mohd Shahrol Nizam 14 Menteri Besar Selangor Incorporated (MBI) YM Raja Shahreen Ym Raja Othman 15 Menteri Besar Selangor Incorporated (MBI) En Daud 16 Ministry of Transport Malaysia Afzainizam B Aziz 17 National Aerospace Industry Coordinating Shamsul Kamar Abu Samah Office (NAICO) 18 Pejabat Daerah Tanah Petaling Roslinah Bt Md Jani 19 Pejabat Tanah Dan Galian Selangor Mohd Azrul Bin Hashim 20 Perbadanan Kemajuan Negeri Selangor Hajah Norita Mohd Sidek (PKNS) 21 Perbadanan Kemajuan Negeri Selangor Wan Zuraimy B Che Wan Zaid (PKNS) 22 SME Corp Malaysia Khariyah Jaafar 23 SME Corp Malaysia Aminuddin Muhamed 24 Technology Depository Agency Sharoul Jambari

91

STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER 5.5 FGD with Aerospace MRO

Date: 19th November 2018


Venue: Invest Selangor

List of attendees:

Table 19: Aerospace MRO FGD attendees

Agency Name

1 Add Power Aviation Miguel Ah-Yam 2 Aerospace Technology Systems Corp Shahril Kadir 3 Aerotree Defense & Services Sdn Bhd Zamri Yeop Zainon 4 Aerotree Defense & Services Sdn Bhd Mohd Faiz Bin Rahim 5 Agustawestland Malaysia Sdn Bhd Nasir Ramly 6 Asia Aerotechnic Sdn Bhd Faiz Daud 7 Choppertech Services Sdn Bhd Robin Chin 8 D'Viation Abd Rashid Sharif 9 Execujet Malaysia Sdn Bhd Ivan Lim Wah Teik 10 Execujet Malaysia Sdn Bhd Suniljit Singh 11 Hawker Pacific (Malaysia) Sdn Bhd Major Ir. Kandiah Padmanathan (Rtd) 12 Nash Aerostar Services Viknendran. M 13 Nash Aerostar Services A. Naga 14 National Aerospace & Defense Industries Ahmad Fuzli Bin Fuad 15 National Aerospace & Defense Industries Y.Bhg Brid Gen Dato' Abdul Rahim Bin Abdul Rahman 16 Sapura Aero Noor Ashikin Ismail 17 Sapura Aero Elham Farhan Alias 18 Sapura Aero Syahril Nizam Ahmad Shariff 19 Tri Aero Sdn Bhd Rosdin Bin Razali 20 Tri Aero Sdn Bhd Hurul Bt Zulkifli 21 Star Tulip Aviation Sdn Bhd Mohd Noor Azam Bin Nasir 22 Star Tulip Aviation Sdn Bhd Lilliesh Kumar

92

STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER 5.6 FGD with Aerospace Manufacturing

Date: 21st November 2018



List of attendees

Table 20: Aerospace Manufacturing FGD attendees

Agency Name

1 Bae Systems International Ltd John Stocker 2 Sapura Industrial Berhad Fareza Fazidi B. Fazi 3 Sme Aerospace Sdn Bhd Suffian Eltrada Ahmad 4 Sme Aerospace Sdn Bhd David F.J. Davies 5 Spirit Aerosystems Malaysia Sdn Bhd Datuk Zulkarnain Mohamed 5.7 FGD with System Integrations, Engineering and Design Services

Date: 22nd November 2018



List of attendees:

Table 21: Aerospace Systems Integration and Engineering and Design FGD attendees

Agency Name

1 Mawea Industries Kelvin Mak 2 Strand Aerospace Ahmad Sharkamin 3 Strand Aerospace Afif Bin Badhrulhisham 4 Innopeak (M) Sdn Bhd Suzanna Shahari 5 Teksoft (Sea) Sdn Bhd Evelyn Yeoh

93

STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER 5.8 FGD with Aerospace Training and Education

Date: 23rd November 2018



List of attendees:

Table 22: Aerospace Training and Education FGD attendees

Agency Name

1 Dilog Training & Services Ahmad Jeffrie Jayos 2 Dilog Training & Services Mohamad Sophian 3 Dviation Training Center Ganesh Thiruselvam 4 Dviation Training Center Ibnu Hidayat Ishak 5 Dviation Training Center Abd Rashid Sharif 6 Zrts Training Sdn Bhd Muhammad As Suhaimi Bin Shuhardi 7 MAB Academy Capt Kamarudin 8 Apr-Aviation Training Centre Amiranorkisza Binti Amirudin 9 Dilog Training & Services Ahmad Jeffrie Jayos 10 Dilog Training & Services Mohamad Sophian 5.9 Workshop 5: Review and feedback from executive committee

Date: 8th January 2019



List of attendees:

Table 23: Executive committee

Agency Name

1 Selangor State Senior Executive Councillor (EXCO) Dato' Teng Chang Khim 2 CEO Invest Selangor Berhad Dato' Hasan Azhari Hj. Idris

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER 5.10 Workshop 6: Selangor State GLC Consortium

Date: 30th January 2019



List of attendees:

Table 24: Selangor State GLCs

Agency Name

1 Menteri Besar Selangor Incorporated Siti Nurhazwani Md Sabudin 2 Permodalan Negeri Selangor Berhad Mohd Helmi Mohd Yusof 3 Permodalan Negeri Selangor Berhad Hairolnisam Isnin 4 Perbadanan Kemajuan Negeri Selangor Wan Zuraimy Che Wan Zaid 5 Yayasan Selangor Ar Hj Mohd Jamil Hj Idris 6 Menteri Besar Selangor Incorporated Daud Abd Rahman 7 Menteri Besar Selangor Incorporated Mohd Sabri Md Shariff 8 Menteri Besar Selangor Incorporated Shahrul Fazli Ramle 9 INSPENS Ahmad Zabri Mohd Yaman 10 Menteri Besar Selangor Incorporated Baihaqi Kamarudin 11 NAICO Shamsul Kamar Abu Samah 5.11 Workshop 7: Town hall Meeting in presence of Menteri

Besar, Selangor Date: 26th February 2019



AGENDA: Town Hall for The Selangor Aerospace Action Plan and Selangor Aerospace Council Meeting

08.00 am Arrival of guests and registration

09.00 am Arrival of YAB Dato’ Menteri Besar Selangor

09.10 am Opening speech by: Dato’ Hasan Azhari Hj. Idris, Chief Executive Officer, Invest Selangor Berhad

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER 09.20 am Inauguration speech by: YAB Dato’ Menteri Besar Selangor

09.30 am Presentation of the Selangor Aerospace Action Plan by: Frost & Sullivan

10.30 am Q&A session

11.30 am Selangor Aerospace Council meeting for VIPs

01.00 pm End of Program and Lunch Key Delegates:

• Yang Amat Berhormat Tuan Amirudin Bin Shari, Dato’ Menteri Besar Selangor, • Yang Berhormat Dato’ Masri Mohd Daud, Selangor State Legal Advisor; • Yang Berhormat Dato’ Teng Chang Khim, Selangor State Executive Councillor (EXCO) • Yang Berbahagia, Dato’ Hasan Azhari Bin Hj. Idris,Chief Executive Officer, Invest

Selangor Berhad; • Yang Berbahagia, Dr. Anis Mahmud @ Abdul Samad, Deputy Secretary General (Policy

and Entrepreneurship Strategy) Ministry of Entrepreneur Development; • Yang Berbahagia, Shamsul Kamar Abu Samah, Head of National Aerospace Industry

Coordinating Office (NAICO);Federal and State Government Agencies List of attendees:

Table 25: Town hall participants from agencies and industry

COMPANY NAME ABDULLAH CHAN & CO DATIN SHELINA RAZALY WAHI ABDULLAH CHAN & CO DATO' MUTHANNA ABDULLAH

ADMAL AVIATION GROUP MALEK PACKEER ADMAL GROUP AZIZULHISHAM CHE HASHIM

AEROSPACE MALAYSIA INOVATION DR LIEW KAN ERN AEROSPEED ASIA PTE LTD ANDY LIM SONG SOON PJK

AEROTREE DEFENCE & SERVICES SDN ZAMRI YEOP ZAINON AIR ASIA EN NADZRI HASHIM

AIRBUS MALAYSIA RAYMOND LIM ALLIED AERONAUTICS TRAINING SINNAPAR PERUMAL

ALLIED AERONAUTICS TRAINING ANNANTHAN SINIVESAN ALLIED AERONAUTICS TRAINING DR. MAHENDRAN

APR-AVIATION TRAINING CENTRE SDN AMIRANORKISZA AMIRUDIN APR-AVIATION TRAINING CENTRE SDN AMIRA NORKHALIDAH AMIRUDIN

ASAHI AERO MALAYSIA SDN BHD YEW BEE FUANG ASAHI AERO MALAYSIA SDN BHD LEE MENG HUI

ASBAA TAN SRI RAVINDRAN MENON ASBAA MR EMIL POPE

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER ASTRONAUTIC TECHNOLOGY (M) SDN IR. NORHIZAM BIN HAMZAH BAE SYSTEMS (INTERNATIONAL) LT KOL AZHAR BIN MOHAMAD

BHIC HASLI BOLLORE LOGISTICS MALAYSIA SDN NORLIN SYAZWALINDA AB HALIM

BOLLORE LOGISTICS MALAYSIA SDN SHANAZ BIN SHARIFFUDIN CAIDMARK SDN BHD AZMAN BIN ABD AZIZ @ ESA

CTRM SDN BHD SHAHRULNIZAM AHMAD CTRM SDN BHD MOHD HANAFFI ABU TALIB

D'VIATION GROUP KEVIN TEOH D'VIATION SOLUTIONS SDN BHD ABDUL RASHID BIN SHARIF

D'VIATION SOLUTIONS SDN BHD IBNU HIDAYAT ISHAK D'VIATION SOLUTIONS SDN BHD ALAN TAN

DILOG TRAINING & SERVICES SDN BHD MOHAMMAD SOPHIAN BIN BARTAN DILOG TRAINING & SERVICES SDN BHD AHMAD JEFFRIE JAYOS

EXECUJET MALAYSIA IVAN LIM FDNANO VENTURES IQBAL SHAMSUL

GERMAN-MALAYSIAN INSTITUTE SOHAIMI PAWANCHI GERMAN-MALAYSIAN INSTITUTE MOHD TANWYN BIN MOHD KHUSHAIRI

GLOBAL TURBINE ASIA DATO' NONEE ASHIRIN DATO' MOHD GLOBAL TURBINE ASIA EN JOHAN EFFENDY JEDIN

INNOPEAK (M) SDN BHD SUZANNA SHAHARI INPENS AHMAD ZABRI MOHD YAMAN

INTERIORS AEROSERVICES SDN BHD NOOR HIDAYATI BINTI JAAFAR INTERIORS AEROSERVICES SDN BHD NOOR NAZHATULSHIMA BINTI AHMAD

JAB. ALAM SEKITAR HEDZIR ZAKARIA JAB. KERJA RAYA SELANGOR EN IR ABDUL KHALID S. ABDULLAH

JAB. KERJA RAYA SELANGOR EN IR RAMENDRAN LOGANATHAN JAB. KERJA RAYA SELANGOR EN MOHD FAIRUZ ISNAN

KEM. PEMBANGUNAN USAHAWAN AHMED SYAM CHE KUB KEM.PENGANGKUTAN EN STIEN VAN LUTAM

KHAZANAH NASIONAL BERHAD ANGELA CHONG LUAS EN AZHAR

MALAYSIA AEROSPACE INDUSTRY EN MD SALIMI ABD RAHMAN MALAYSIA AEROSPACE INDUSTRY CIK NUR AINAA NAJLAA MOHD NOR

MALAYSIA AEROSPACE INDUSTRY EN MUHAMMAD SHAHRUL NIZAM SAIFUL MALAYSIA AIRLINES BERHAD (MAB) EN AHMAD LUQMAN MOHD AZMI

MALAYSIA AIRLINES BERHAD (MAB) BADRUL HISHAM ZAINAL MALAYSIA AIRLINES BERHAD (MAB) EKE NAZRI RAHIM

MALAYSIA AIRPORTS HOLDINGS K ARAVINTHAN KUNJU RAMAN MALAYSIA AIRPORTS HOLDINGS WOON SUE LING

MALAYSIA AIRPORTS HOLDINGS SARAVANA KUMAR MALAYSIA AIRPORTS HOLDINGS ZAWANI ASRI

MALAYSIA AIRPORTS HOLDINGS CHEE CHOW LIU

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MALAYSIA AIRPORTS HOLDINGS EN RANDHILL SINGH

MARA AEROSPACE & TECHNOLOGIES ADDI FAIZ ADNAN MARA AEROSPACE & TECHNOLOGIES ABDUL MALIB B LUDIN

MARKORA SYSTEM LUKE RAJ MATRADE PN YUSLINAWATI MOHD YUSOF

MATRADE EN MOHD SHAHROLNIZAM MOHD SHAH MBI EN SHAHRUL FAZLI

MBI EN DAUD ABD RAHMAN MBI EN MOHD SABRI MD SHARIFF

MDKL TN HJ ARPAII HAJI SANAT MDKS EN SAZLAN HAKEEM MAZALAN

MDSB PN AZIZAH HAMZAH MIDA HQ EN MOHD FARIDZ AKRAM MOHKTAR

MIDA HQ EN ZAHIRUL ISHAK MIDA SELANGOR PN NOOR AINI SAMOON

MIGHT DATUK DR MOHD YUSOFF SULAIMAN MPAJ EN AHMAD ALHAIRI MOHAMED YUSUF

MPKj EN REDUAN IDRIS MPS ROSMALIZA

MPSEPANG RUHAIDA RAHMAN MYIPO AMBASSADOR (RTD) TUNKU DATUK

NAICO EN SHAMSUL KAMAR ABU SAMAH NASH AEROSTAR SERVICES SDN.BHD VIKNENDRAN.M

NASH AEROSTAR SERVICES SDN.BHD A.NAGA

NATIONAL AEROSPACE & DEFENCE NATIONAL AEROSPACE & DEFENCE NATIONAL AEROSPACE & DEFENCE NATIONAL AEROSPACE & DEFENCE

NRH PUBLICATIONS SDN BHD PDT HULU SELANGOR

BRIG GEN DATO’ ABDUL RAHIM BIN DATO’ EDRON HAYATA BIN AHMAD

SHAHRIL KADIR MR. SUFFIAN ELTRADA BIN AHMAD

DATIN NIK RADIAH HASSAN CIK DEWI DIRWANA MUNASIR

PDT PETALING EN MOHD ZAIME MISRI

PEAK LINE (M) SDN BHD SYUKRAN IDRIS PKNS PN HJH NORITA MOHD SIDEK

PKNS WAN ZURAIMY B CHE WAN ZAID PNSB EN MOHD HELMI MOHD YUSOF

PNSB EN HJ HAIROLNISAM ISNIN PWN EXCELLENCE SDN BHD ASPALEILA BINTI TAJUDIN

PWN SUK PN SHARIFAH NORSALINA SYED NAWAWI PWN SUK PN NOOR SYAHIDAH SAADON

SAPURA AERO SDN BHD AJITPAL SINGH SAPURA AERO SDN BHD ILYAS ALEX CHAN

SAPURA AERO SDN BHD NOOR ASHIKIN BINTI ISMAIL SAPURA AERO SDN BHD HILMY YUNUS

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER SAPURA AERO SDN BHD KHAIRUN MAHIRAH JAINI SAPURA RESOURCES BERHAD / DATO' SHAHRIMAN SHAMSUDDIN

SELANGOR HUMAN RESOURCE TEH ENG GUAN SELANGOR HUMAN RESOURCE MASLIZA OSMAN

SKYPARK FBO/RAC MALAYSIA MAZLINA MOHAMAD SKYPARK FBO/RAC MALAYSIA RAGHBIR SINGH BHALL

STANDARDAERO DANISH LAU STRAND AEROSPACE MALAYSIA SDN. HAFEEZ KAMARUZZAMAN

STRAND AEROSPACE MALAYSIA SDN. IZHAM ZAKARIA T7 GLOBAL BERHAD TAN KAY VIN

T7 GLOBAL BERHAD TAN KAY SHEN T7 GLOBAL BERHAD JOSEPH FOONG

TECHNOLOGICAL ASSOCIATION TS YAP SHENG LIN TECHNOLOGICAL ASSOCIATION TS KARNANETHE

TECHNOLOGICAL ASSOCIATION ADAM YEONG LIT YANG TECHNOLOGICAL ASSOCIATION DR VINCE SEE

TECHNOLOGICAL ASSOCIATION MAGGIE YAP CHENG HONG TECHNOLOGY DEPOSITORY AGENCY SHAROUL JAMBARI

UMW AEROSPACE SDN. BHD. MOHAMAD AZILI SAMAD UMW DEVELOPMENT SDN BHD DR WAFI NAZRIN ABDUL HAMID

UMW DEVELOPMENT SDN BHD DATO' ABDUL RASHID MUDA UMW DEVELOPMENT SDN BHD MR ERIC CHEW KAR EAN

UMW DEVELOPMENT SDN BHD MS LYNN YUSOF UMW DEVELOPMENT SDN BHD SITI FATIMAH BT ISHAK

UNIKL MIAT TS R KARNANETHE (P.J.K) UNISEL YUSMAN ISTIHAT

UNISEL IR PIONG YEE HWONG UNISEL PROF MADYA DR FRIDELINA

UNIVERSITY OF NOTTINGHAM DEBORAH HALL UNIVERSITY OF NOTTINGHAM LIM CHIN SEONG

UPEN PN NURUL HUDA MA'AROF VAS AERO MALAYSIA SDN BHD MARIA ISMAIL

WCT HOLDINGS BERHAD LAI CHENG YEE YAYASAN SELANGOR PN ZAHURA ZAKRY

YAYASAN SELANGOR EN JAMIL IDRIS

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER 5.12 Industry Banners for Townhall Meeting Figure 25: ASEAN Fleet and MRO Forecast

Figure 26: Malaysian Fleet and MRO Dynamics

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER Figure 27: Malaysian MRO and Manufacturing Revenue Trends Figure 28: Asia Pacific MRO Forecast and South East Asia MRO Forecast by Country

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STUDY TO PREPARE ACTION PLAN FOR SELANGOR AEROSPACE CLUSTER Figure 29: ASEAN Fleet and MRO Comparison by Country and Segments Figure 30: ASEAN MRO Demand by Airframe, Engine and Components

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SELANGOR AEROSPACE ACTION PLAN 2020 - 2030 FINAL REPORT

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