Speech by DPM and Minister for Trade and Industry Gan Kim Yong at the groundbreaking ceremony of Singapore Aero Engine Services Private Limited's (SAESL) Maintenance, Repair and Overhaul Expansion

His Excellency, Mr. Nikesh Mehta, British High Commissioner to Singapore,

Mr. Chin Yau Seng, Chief Executive Officer, SIA Engineering Company (“SIAEC”) and Deputy Chairman of SAESL,

Mr. Peter Lord, Rolls-Royce Board Director of SAESL,

Mr. Simon Middlebrough, Chief Executive Officer, SAESL,

Distinguished Guests,

Ladies and Gentlemen

1. Good morning. It is my pleasure to join you today for the groundbreaking of Singapore Aero Engine Services Private Limited (SAESL)’s new facility for aero-engine Maintenance, Repair and Overhaul (MRO).

2. Since starting operations in 2001, SAESL has grown from a company primarily servicing Singapore Airlines’ Trent engines into a market leader for engine overhaul and component repair.

   1. Today, over 20% of the world’s Rolls-Royce Trent engines pass through SAESL; this includes the engines in aircraft such as the Airbus A330, A350 and A380, as well as the Boeing 787 Dreamliner.

   2. These capabilities have enabled SAESL to establish itself as one of the largest MRO sites for commercial aero-engines within Rolls-Royce’s worldwide network.

   3. SAESL has also built complementary strengths in component repair, and is now capable of repairing over 80% of all components in the engine; this includes complex components such as fan blades, nozzle guide vanes, combustion liners and compressor stator vanes.

3. Together with the presence of companies such as Rolls-Royce and SIAEC, we have developed a strong aerospace industry in Singapore.

   1. Over the past two decades, the total output of our aerospace industry has grown at about 6% annually, reaching a high of more than S$15 billion in 2023.

   2. We contribute to about 10% of global MRO output, and serve as Asia’s leading aerospace MRO hub.

   3. We are also home to one of the largest and most diverse aerospace ecosystems in Asia, with over 130 companies across R&D, manufacturing, MRO, after-market services and SME suppliers.

4. The market leadership that Singapore has established puts us in a strong position to capture the projected growth of the global aerospace industry, as more planes take to the skies with the rising demand for air travel.

   1. In particular, Asia Pacific continues to be an important growth region and is expected to account for more than 35% of the global fleet over the next decade¹.

5. We will help companies in Singapore expand their capacity, build new capabilities, and forge new partnerships, to capture the opportunities arising from this growth.

6. Today’s groundbreaking is part of a S$242 million expansion that will see SAESL grow its capacity and develop new capabilities.

   1. It will increase SAESL’s MRO capacity by 40%, enabling it to service over 400 engines annually by 2028. This will make it the world's largest MRO facility for Rolls-Royce’s latest-generation engines.

   2. It will allow SAESL to incorporate new automation and digitalisation that will enhance labour productivity, reduce process time across critical processes by up to 50%, and accelerate data analytics and decision-making capabilities.

   3. It will also enable SAESL to develop new capabilities in component repair. This includes –

      1. Repairs for critical hot section components such as blisks and disks;

      2. As well as industrialise new engine repair technologies such as additive repairs for engine seal segments and adaptive machining for high-value engine components.

7. As it expands its capacity and capabilities, SAESL will need new innovations to stay competitive. I am glad that SAESL and Rolls-Royce will be furthering its partnership with A*STAR under Phase 2 of the Smart Manufacturing Joint Lab (SMJL) with a new investment of S$34 million.

   1. This new investment builds on their fruitful collaboration in Phase 1, which saw the successful implementation of 18 projects that have improved process lead time by 30 – 50%.

   2. Under Phase 2 of the SMJL, both companies will work with A*STAR to develop new technologies to improve operational efficiency and output, such as enhancing re-manufacturing techniques for complex repairs, improving engine assembly and disassembly processes, and developing advanced automation and inspection technologies with AI-enabled predictive capabilities.

   3. This partnership will also open up new opportunities for our local enterprises along the MRO value chain.

      1. Under Phase 1 of the SMJL, more than 200 local SMEs found opportunities to collaborate with Rolls-Royce and SAESL to develop and supply new manufacturing and MRO capabilities and services.

      2. For example, Zincode Technologies and Sysmatic Global have successfully become qualified suppliers and integrators providing automated aero-engine component inspection services for SAESL.

   4. I hope that this new partnership will also strengthen the nexus between our research institutes and industry, so that they can tap on each other’s strengths and capabilities to drive Singapore’s growth as an innovation-led economy.

8. SAESL has also invested in talent and workforce development to ensure a strong pipeline of skilled workers to support its expansion plans.

   1. For example, under the work-study programme with Temasek Polytechnic, SAESL has trained about 350 technicians since November 2021.

   2. SAESL also offers traineeship programmes for trainees to learn on the job, so that they can gain a first-hand feel of working on the Trent engines.

   3. These initiatives will be key to ensuring that SAESL has the skilled manpower to fill the 500 new engineering and technical positions it will create to support its expansion.

9. Once again, congratulations to SAESL, Rolls-Royce, and SIAEC on the groundbreaking of your new facility. I am confident that your expansion in capacity, investments in capabilities and partnerships with the larger aerospace ecosystem will enable you to capture the rising demand for MRO in the years ahead, strengthen your position as a global leader in engine MRO, and contribute to a stronger aerospace industry in Singapore.

10. Thank you.

[1] Oliver Wyman, Global Fleet and MRO Market Forecast 2024-2034, Feb 2024.