Further investments in Asian manufacturing facilities are likely for UK engine maker Rolls-Royce, with the company viewing this as a safeguard against rising costs and adverse currency exchange rates.
While facilities in Derby in the UK will continue to be the focal point of the company's operations, Rolls-Royce South-East Asia regional director Jonathan Asherson says further opportunities will come up in Asia.
"I would be amazed if in five, 10 or 20 years from now, we are not investing more in Asia," he says.
The first major investment came last week, when R-R unveiled plans for a S$320 million ($221 million) plant in Singapore to produce up to 400 engines when fully operational by the end of 2009.
The facility, the first in Asia to manufacture engines for large passenger aircraft, will produce the Trent 1000 for the Boeing 787 and Trent XWB for the Airbus A350 XWB. These will be manufactured and certificated in Singapore before being shipped to the respective aircraft assembly plants in the USA and France.
R-R also announced a new plant in Virginia last week to assemble the RB282 engine for Dassault's new mid-size corporate jet and undertake blisk manufacture for the Lockheed Martin F-35 Joint Strike Fighter's General Electric/R-R F136 engine.
Taken together, the investments represent a "continuing trend towards the globalisation of our operations", says R-R chief executive John Rose. This is driven by the attraction of locating facilities close to customers in two of the largest and fastest growing aerospace markets, the benefits arising from locating the assembly and test of Trent engines on two continents, and a reduction in the exposure to the US dollar, adds the company.
The Singapore facility is a shot in the arm for the country, which harbours hopes of becoming a major regional aviation hub. This is the island's first major aerospace manufacturing facility and will be located on an 8Ha (20 acre) site at the recently launched Seletar Aerospace Park, now home mainly to maintenance, repair and overhaul and corporate aviation firms.
R-R has an option for an adjacent 10Ha site, meaning it could expand its operations to assemble and test later versions of the Trent engine.
This "represents a quantum leap for the aerospace industry in Singapore", says the Economic Development Board, a government agency tasked with attracting investments to the country. R-R considered other sites in Asia for the facility, but the final option was between a location in the USA and Singapore. The Economic Development Board spent eight months negotiating with the company before a decision was made.
While acknowledging that other countries offer lower labour costs, Asherson says the lower rate of inflation and high skills base of Singapore workers helps to offset the cost of shipping finished engines to the USA and France.
"We do expect the Singapore factory to be extremely efficient, so any cost savings we achieve through this will be passed on to our customers," he adds.
Source: Flight International
