BUKIT KAYU HITAM: Aerospace Composites Malaysia Sdn Bhd (ACM) expects to generate US$65 million in revenue from the supplies of composites parts this year, from US$60 million last year.
ACM managing director Jose Garza said the target would be driven by renewal of Boeing aircraft components extension contracts and spare parts for Boeing commercial aircraft.
He said ACM had secured a guaranteed work orders from clients for the period of 2021 to 2024 and aims to extend the existing contracts with Boeing.
“We expect some of those contracts to be extended from this year to 2026 or 2028. We are in the midst of negotiating for some contracts extension on the aircraft components with Boeing,” he told reporters at a celebration of ACM’s 1.5 millionth part milestone here, yesterday.
ACM celebrated the local production of the 1.5 millionth part since its commenced operations in 2001.
The event was graced by Kedah Sultan Sallehuddin Badlishah. Also present were Kedah Crown Prince Tengku Sharafudin Badlishah Sallehuddin and Kedah Chief Minister Datuk Seri Mukhriz Tun Mahathir.
Although there might be a greater slowdown in the global economy, Garza said the aerospace industry would not be affected.
ACM expects robust demand for the sector.
“For example, the supply chain in aerospace sector is complex as there are multiple tiers. We have a couple of systems suppliers in Malaysia like Honeywell.
“We see the business environment in Malaysia being very healthy and attractive to suppliers for the moment,” he added.
ACM currently manages 36 programmes for Boeing, producing about 13,000 parts monthly for the Boeing commercial flight surfaces including the next generation 737, 737 MAX, 747-8, 767, 777, 777x and 787 Dreamliner.
Established in 1998, ACM is a 50:50 joint-venture (JV) company between the Boeing Company and American Industrial Materials company, Hexcel Corp.
ACM supplies composite products and subassemblies to the global aerospace sector.
Garza said ACM had produced 150,000 components for Boeing commercial aircrafts in 2018, citing that the bulk of it was for spare parts of the aircraft wings panel.
“We usually deliver more than what we planned every year. We produce main components of the flight surfaces, particularly the wings parts from small to medium size panels,” he added.
Garza said ACM would reduce its capital expenditure (capex) this year, and focus on capturing work to fill up the capacity (contracts) that the company had secured.
“We have invested heavily in capex in the last two years. We had installed the computer numerical controller (CNC) and new non-disruptive inspection ultra sound machines.
“We will invest for the replacement of CNC machine, automatic trimming machine for the aircrafts parts) and bring in more new technology for automation,” he said.
He said ACM had grown its workforce by 11 per cent with the addition of nine new products for aircraft components last year. To date, ACM employs about 1,000 Malaysians and expects the trend to continue.
Garza said ACM had no intention to list the company, citing that it would remain as a joint venture in Malaysia which allow the company to have more flexibility in terms of investments and production.
“ACM is one of the Boeing entities. Malaysia offers a lot of advantage for us in terms of cost competitiveness, good performance in terms of quality and on time delivery.
“We try to capitalise on those benefits by increasing the amount of works in Malaysia,” he said.
ACM also directly supports Boeing Tianjin Composites, Boeing Aerostructures Australia and Spirit Aerosystems.