Mr Lee Yi Shyan at SAESL Facility Expansion Groundbreaking Ceremony

SPEECH BY MR LEE YI SHYAN MINISTER OF STATE FOR TRADE AND INDUSTRY AT SAESL FACILITY EXPANSION GROUNDBREAKING CEREMONY AT SAESL ON 18 FEBRUARY 2008 AT 3.00PM

Sir John Rose, Chief Executive, Rolls-Royce

Mr Stephen Lee, Chairman, SIA Engineering Company

Mr William Tan, CEO, SIA Engineering Company

Mr Miles Cowdry, Chairman, SAESL

Mr John Horsburgh, outgoing CEO, SAESL

Distinguished representatives from HAESL, SIA Engineering Company and Rolls-Royce,

Introduction

I am delighted to be here at the ground-breaking ceremony for the new SAESL’s facility in Singapore. SAESL’s groundbreaking coincides with the inaugural Singapore Airshow starting tomorrow.

Importance of Singapore’s MRO and the advantage of clustering

Since 1990, Singapore’s aerospace industry has grown over 13% annually, with nose-to-tail capabilities spanning airframe maintenance and modification, engine overhaul, as well as components and systems repair. This extensive span of services demonstrated Singapore’s commitment to become Asia’s most comprehensive MRO hub.

About 90% of the output of our aerospace industry is from the MRO sector. Our comprehensive MRO capabilities and Singapore’s air hub status are also mutually reinforcing. The MRO sector is hence a critical and growing industrial activity for Singapore. With Asia expected to lead the growth in air travel going forward, there will be a strong demand for MRO services.

Many companies consider their Singapore operations as Centers of Excellence and leaders in efficiency. This gives us a significant advantage as we have the ability to offer airlines a total solution with a fast turnaround time.

Consider, for example, how aircraft sent to Singapore for airframe maintenance can have their engines sent to SAESL for overhaul and the components sent to IECO, the sister company of SAESL in Singapore, for repair. Having all this done in Singapore translates to the shortest possible turnaround-time and immense cost savings for the airlines. Singapore will continue to build on this strength in MRO by emphasizing the development of integrated MRO solutions, including fleet technical management, asset management, and repair development. These value added services have become increasingly important as airlines progressively outsource non-core activities.

Singapore’s commitment to the aerospace industry

Singapore is strongly committed to the aerospace industry, investing heavily in manpower and infrastructure to support its growth. We have set aside 300 ha of land at Seletar Aerospace Park for the aerospace industry, a major commitment for a small country. The Seletar development will create new markets and opportunities for us, including in the fast expanding area of business aviation. When fully developed by 2015, the Seletar aerospace park is forecast to contribute S$3.3b per annum in value added, and create more than 10,000 in employment. I am delighted that the first phase of development has seen strong take-up[1].

We are also deeply committed to growing our R&D infrastructure to nurture such knowledge-intensive activities in aerospace. In recognition of this, the Institute of Technical Education, all 5 polytechnics and our 2 technical universities have implemented courses dedicated to aerospace technology. Further, as part of the Aerospace R&D Programme at our Agency for Science, Technology and Research or A*STAR, Boeing, EADS, Pratt & Whitney and Rolls-Royce have formed a consortium of researchers to embark on aerospace R&D.

The EDB also works actively with industry players and educational institutions to introduce aerospace courses and highlight careers in this industry. In fact, we have introduced, on average, two new aerospace courses per year, in our tertiary institutions. This will bring the number of people graduating from aerospace-specific courses to over 1,000 annually by 2009 – double the 2006 figures.

Furthermore, we maintain a liberal policy for skilled workers from all over the world to complement the Singapore workforce. Quality human capital is a key differentiator for Singapore to grow as a global aerospace hub. The steps we have taken ensure there is a ready pool of skilled, well-trained and experienced workers for aerospace companies in Singapore.

Conclusion

We have been able to grow our aerospace industry because of the strong partnership we witness here today.

I would like to extend my warmest congratulations to the management and staff of SAESL on the expansion of your operations, and trust that the partnership between Singapore, Rolls-Royce and SIA Engineering Company will continue to progress from strength to strength.

Thank you!

[1] Rolls-Royce Trent Engine Assembly Facility (groundbreak on 19th Feb); Pratt & Whitney MRO Campus (groundbreak 21st February); ST Aerospace Hangar Opening for Freighter Conversion (opening 21st February)