Taiwanese company may attempt to buy into US helicopter manufacturer, although funding could be a problem
Taiwan's Aerospace Industrial Development Corporation (AIDC) is proposing a tie-up with Enstrom Helicopter that could result in the Taiwanese government taking a stake in the US manufacturer.
Industry sources say AIDC's new management team has identified Enstrom as a possible acquisition target and manufacturing light helicopters as a potential new business opportunity.
AIDC has already sent two delegations to Enstrom over the last several months. But an AIDC source says the company is still waiting for word from its leadership on whether to proceed with pursuing a tie-up. Sources say Enstrom is evaluating the feasibility of a link with AIDC, but is doubtful a deal can be struck. Enstrom president Jerry Mullins says, however: "There are no discussions that have reached the stage that would warrant any comment or announcement".
Government-owned AIDC is looking for new projects as part of an attempt to expand revenues by 30-40% over the next five years to $470 million. It already has helicopter experience supplying components for Bell, Eurocopter and Sikorsky.
In the past, Taiwan has invested in general aviation aircraft projects in exchange for work share and today holds stakes in Ibis Aerospace, Sino Swearingen Aircraft and Tiger Aircraft. The government is considering further focusing its aerospace industry on general aviation instead of pursuing more aircraft component deals, which Taiwan is struggling to turn profits on because it has higher labour costs than most other Asian countries.
Sources believe AIDC may have trouble coming up with the funds required to purchase all or part of Enstrom, or invest further in existing projects such as the Ibis Ae 270. Taiwan is evaluating whether to pump more funds next year into the Ae 270 and at least for now it has been persuaded to halt an attempt by AIDC to pull out of the joint venture with the Czech Republic's Aero Vodochody and recoup some of its original $32 million investment.
Asia has proven a critical market for privately owned Enstrom, which has delivered 18 480B turbine helicopters this year to the Indonesian police. A follow-on order in Indonesia could occur next year and Enstrom has sales campaigns in other Asian countries, including China, Pakistan and South Korea. Taiwan's light helicopter and entire general aviation market is virtually non-existent, but manufacturers hope for a flood of sales if Taiwan follows through on its promise to lift a ban on private aircraft operations.
BRENDAN SOBIE / SINGAPORE
Source: Flight International
