Singapore, 6 June 2019 – Singapore Technologies Engineering Ltd (ST Engineering) today announced that its Aerospace arm and Vietnam Airlines Engineering Company (VAECO), a subsidiary of Vietnam Airlines Co Ltd, have incorporated a new joint venture company, Vietnam Singapore Technologies Engineering Aerospace Co. Ltd. (JVCo), in Vietnam.
The setting up of the JVCo, which establishes the Group’s first presence in Vietnam, follows a Memorandum of Understanding announced on 26 April 2018. The JVCo was set up with a paid up capital of US$3.9m (approximately S$5.3m) to provide component Maintenance, Repair & Overhaul (MRO) solutions. ST Engineering has a 49% stake in the JVCo, with the remaining 51% held by VAECO.
The JVCo will leverage Vietnam Airlines’ existing maintenance facilities at Noi Bai International Airport in Hanoi and Tan Son Nhat International Airport in Ho Chi Minh City by investing in new infrastructure for carrying out component MRO work at these facilities. The new component MRO facilities are expected to begin operations in mid-2019 to cater to Vietnam Airlines’ requirements and the region’s rising needs for aircraft component MRO services. These facilities will be equipped to support aircraft types including but not limited to the A320 Family, A350, Boeing 787 and ATR72, and carry out MRO work on pneumatics, hydraulics, electrical components, wheels and brakes as well as safety equipment.
“Asia is a key region driving the growth of the global commercial aerospace sector. A presence in Vietnam, which enjoys double-digit growth in the air travel sector, will enable us to better capture that growth with an expanded MRO network in the region," said Mr Lim Serh Ghee, President of ST Engineering’s Aerospace sector. "Our partnership with Vietnam Airlines, which has existing maintenance facilities in the country, not only enables us to set up capabilities within a very short timeframe but also allows us to start operating with a ready base-load.”
Through a global network of distribution centres, satellite stores and in-house and external repair shops, ST Engineering provides a wide range of aircraft component management and support services including its trademarked Maintenance-By-the-Hour programme. In addition to component MRO, ST Engineering has expertise that covers airframe and aerostructure MRO, which will help in the JVCo’s future expansion into a wider range of aircraft maintenance solutions.
The setup of this JVCo is not expected to have any material impact on the consolidated net tangible assets per share and earnings per share of ST Engineering for the current financial year.
ST Engineering is a global technology, defence and engineering group specialising in the aerospace, electronics, land systems and marine sectors. The Group employs about 22,000 people across offices in Asia, the Americas, Europe and the Middle East, serving customers in the defence, government and commercial segments in more than 100 countries. With more than 500 smart city projects across 70 cities in its track record, the Group continues to help transform cities through its suite of Smart Mobility, Smart Security and Smart Environment solutions. Headquartered in Singapore, ST Engineering reported revenue of $6.7b in FY2018 and it ranks among the largest companies listed on the Singapore Exchange. It is a component stock of the FTSE Straits Times Index, MSCI Singapore, SGX ESG Transparency Index and SGX ESG Leaders Index.
The Aerospace sector provides integrated aerospace services and solutions through a global network of facilities and affiliates in the Americas, Asia Pacific and Europe, supporting a broad customer base that comprises leading airlines, airfreight operators and armed forces. Its wide spectrum of maintenance and engineering solutions include airframe, engine and component maintenance, repair and overhaul; engineering design and technical services; as well as aviation materials and asset management services. The sector also has original equipment manufacturing capabilities and holds proprietary designs in products such as aircraft seats. For more information, please visit www.stengg.com.