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ST Engineering’s aerospace arm sets up JV with Vietnam Airlines unit
SINGAPORE Technologies Engineering (ST Engineering) on Thursday announced that its aerospace arm and Vietnam Airlines Engineering Company (VAECO), a subsidiary of Vietnam Airlines, have set up a new joint-venture (JV) company in Vietnam.
Called Vietnam Singapore Technologies Engineering Aerospace, the JV - which establishes the group's first presence in Vietnam - follows a memorandum of understanding announced in April 2018. The JV was set up with a paid-up capital of US$3.9 million to provide component maintenance, repair & overhaul (MRO) solutions.
ST Engineering has a 49 per cent stake in the JV, with the remaining 51 per cent held by VAECO.
The JV will leverage Vietnam Airlines' existing maintenance facilities at Noi Bai International Airport in Hanoi and Tan Son Nhat International Airport in Ho Chi Minh City by investing in new infrastructure for carrying out component MRO work at these facilities.
The new component MRO facilities are expected to begin operations in mid-2019 to cater to Vietnam Airlines' requirements and the region's rising needs for aircraft component MRO services, ST Engineering said.
These facilities will be equipped to support aircraft types including the A320 Family, A350, Boeing 787 and ATR72, and to carry out MRO work on pneumatics, hydraulics, electrical components, wheels and brakes as well as safety equipment.
Lim Serh Ghee, president of ST Engineering's Aerospace sector, said: "A presence in Vietnam, which enjoys double-digit growth in the air travel sector, will enable us to better capture that growth with an expanded MRO network in the region. Our partnership with Vietnam Airlines, which has existing maintenance facilities in the country, not only enables us to set up capabilities within a very short timeframe, but also allows us to start operating with a ready base-load."
ST Engineering said its expertise, which covers airframe and aerostructure MRO, will also help in the JV's future expansion into a wider range of aircraft maintenance solutions.
The setup of this JV is not expected to have any material impact on the company's consolidated net tangible assets per share and earnings per share for the current financial year.