AS the 15th Langkawi International Maritime and Aerospace Exhibition (Lima 2019) comes to a close tomorrow, uppermost on people’s minds would be how many deals were signed and their value.
This is common for any trade show — its success or failure is gauged by the numbers. Notwithstanding, international aerospace partnerships at Lima go beyond the purchase of fighter jets, transport aircraft, submarines and offshore patrol boats.
As Prime Minister Tun Dr Mahathir Mohamad puts it, the defence industry answers to a higher calling — the national agenda.
The defence industry had and will continue to contribute to the socio-economic development of the country. As a spin-off to other sectors of the economy, a strong and credible defence industry reinforces the two main pillars of national security — economic wellbeing and political stability.
In our defence asset procurement contracts, the industrial offset programmes ensure not only our military needs but also the spillover effects to the local economy.
This non-conventional trade-financing tool has benefitted Malaysia through, among others, the creation of employment, skilling of the human resources and establishing the country’s aerospace industrial capabilities.
Twenty-five years ago when the government bought 10 Hawk 108s and 18 Hawk 208s for the Royal Malaysian Air Force, the offset programme built around the contract saw the creation of 7,000 jobs and gave the needed kickstart to the establishment of the country’s aerospace industrial capabilities.
Local firms are now part of the global supply chain for major commercial and military aircraft manufacturers in the world. “Made in Malaysia” parts are flying on the entire Airbus civil aircraft product line and its new-generation military airlifter.
We manufacture engine casings in Bayan Lepas, Penang; aircraft composite wings in Bukit Kayu Hitam, Kedah; metallic parts in Shah Alam and Sungai Buloh, Selangor; and aerostructures in Subang, Selangor.
The Malaysian Industrial Development Authority statistics showed that more than 200 aerospace companies comprising international and local industry players are operating here.
These include 66 companies involved in maintenance, repair and overhaul (MRO), 33 (aero-manufacturing), 25 (education and training) and 11 (systems integration, and engineering and design).
Last year alone, the MRO business secured RM14.4 billion revenue with 24,500 highly skilled workers serving the industry.
The aerospace industry is expected to flourish with 11 new aerospace investment projects worth RM800 million approved last year, which is expected to generate more than 1,500 jobs.
Financial constraints may clip the government’s spending on new defence asset procurement; however, the offset could provide a boost to the local economy.
There is room to strengthen our capabilities, not only in the aerospace industry but also the maritime sector.
As Dr Mahathir points out, there are opportunities in ship designing, parts and components manufacturing, system integration, and other marine equipment production.
But if the numbers matter to most, for the record, Lima saw more than RM4 billion in deals inked.