Revenue from the aerospace industry will reach RM30 billion by 2025, and it is imperative to enhance value creation across the whole chain to strengthen the industry's ecosystem in Malaysia.
International Trade and Industry Minister Datuk Seri Mohamed Azmin Ali said in this regard, Malaysian small and medium enterprises (SMEs) had been formidable in a narrow range of aerospace products and, thus, were required to move up the value chain into product and process designing.
He urged SMEs to fully capitalise and embrace advanced technology and high-value investments which comply with environmental, social and corporate governance practices.
Azmin pointed out that the adoption of advanced technology and digitalisation was pivotal in achieving a sustainable supply chain, where the transformation was not only limited to the companies but also suppliers as well as service and utility providers.
"The 12th Malaysia Plan (12MP) charts the direction for the advancement of the aerospace industry as a strategic sector that will realise the nation's aspiration to be a global powerhouse.
"It is estimated that the revenue of the aerospace industry will reach RM30 billion by 2025," he said at the 'Malaysia Aerospace Summit 2021' at the Kuala Lumpur Convention Centre.
Azmin added that with the recovery of the global economy and increased demand for air travel, as well as logistics, the Original Equipment Manufacturers (OEM), such as Airbus, Rolls-Royce, Collins Aerospace and Spirit AeroSystems had declared their intention to increase procurement from more competitive sources.
"Large Malaysian-based players are taking advantage of this development and will require a strong SME supply chain to support local value creation. This provides enormous opportunities for SMEs that are willing to transform to higher value production and operations," he said.
The global aerospace landscape, he pointed out, was accelerating its reforms to meet aggressive carbon footprint reduction aspirations, where the Environmental, Social and Governance (ESG) agenda becomes a prerequisite to participate in the industry.
"Transforming with this requirement provides opportunities for the Malaysian supply chain to be future-ready for other similar global industry requirements.
"This is in line with our National Investment Aspirations (NIA) that encourages advanced technology and high value investments which are ESG compliant.
"In this spirit, I strongly urge the Malaysian SMEs to fully capitalise and respond to this new trajectory," he said, adding that the 'MyAERO'21' was timely and provided the platform for constructive engagement and discussion among industry players on measures to accelerate digital transformation in the aerospace ecosystem.
He explained that the triple helix collaboration involving government, industry and academia remained essential for the successful implementation of strategies to drive the industry forward.
"Universities and research institutions will need to progress with global developments by enhancing research and development capabilities as well as providing talent and expertise in line with the aspirations outlined under the 12th Malaysia Plan and Malaysian Aerospace Industry Blueprint 2030," he said.
Azmin added that it was crucial for industry players to stay resilient and form a strong local ecosystem that could offer one-stop solutions for global clients.
"I would like to reiterate that Malaysia will continue to advocate forward looking, inclusive and business friendly policies to ensure we remain as the preferred investment destination for high impact, advanced technology and precision engineering industries," he said.
On another note, Azmin said the cost-benefit analysis (CBA) of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) would be finalised by year end.
He said the CPTPP was expected to be ratified by the middle of next year.
"We had to conduct the CBA again this year due to the (Covid-19) pandemic since we need to take a second look at the impact of the international trade agreement (CPTPP) that we have signed.
"The CBA will be completed by the end of this year, and when it is submitted, we will get a new mandate from the Cabinet before we continue with the internal process," he said.
Azmin said the findings of the CBA would be tabled before the Cabinet for the evaluation and consideration of the CPTPP.
Read more here: https://www.nst.com.my/news/nation/2021/11/743858/azmin-aerospace-smes-must-move-value-chain-product-process-designing
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