Photographer: SeongJoon Cho/Bloomberg

Singapore Turns Colonial Airstrip Into Hub for Jet Engine Makers

  • City is home to Rolls-Royce's most modern factory outside U.K.
  • Push comes as Asia set to be world's biggest aircraft market

Asia’s ascent toward the top of the world’s aerospace market is being powered by a former colonial airbase in northern Singapore.

Once known for making mosquito coils and hair wigs, Singapore is now a hub for manufacturing the massive engines propelling Airbus Group SE’s superjumbo A380 and Boeing Co.’s Dreamliner. Those efforts are centered across the water from Malaysia at the Seletar Aerospace Park, a former mangrove swamp cleared for a British landing strip.

The area, about the size of New York’s Central Park, has spurred a $6 billion industry that is growing by at least 10 percent a year, according to government data. Pratt & Whitney is boosting spending on a local fan-blade factory by a third, and Rolls-Royce Holdings Plc is diversifying its S$700 million ($500 million) Seletar complex with repair and research facilities.

“Singapore is a hub,” Danny Di Perna, senior vice president of engineering and operations at Pratt & Whitney, said at this week’s Singapore Airshow, where companies are meeting to plan for the industry’s tilt toward Asia. “These are very critical components we are making here. It’s not just anybody that can make them.”

The push comes as surging travel in Asia fuels demand for $2.2 trillion worth of airplanes during the next 20 years, according to estimates by Boeing. Singapore, already a regional powerhouse in aircraft maintenance, is home to Rolls-Royce’s most modern factory outside the U.K. and the only engine-fan facility for Pratt & Whitney outside the U.S.

Engine Backlog

“We don’t have the base for making airplanes so the next-most important thing is the engine and everything else in the plane,” said Song Seng Wun, an economist at CIMB Private Banking in Singapore.

Pratt & Whitney, the engine-making unit of United Technologies Corp., said Monday it planned to spend as much as another $40 million after a $110 million investment on the factory for fan blades and turbine disks. The company has a backlog of more than 7,000 engine orders, and production will ramp up during the next 18 months, Di Perna said.

A skilled, educated workforce and support from the national Economic Development Board prompted the engine maker to choose Singapore, Di Perna said. Singapore already is home to the world’s two biggest manufacturers of oil rigs, and the government has encouraged companies to move up the value chain in sectors such as pharmaceuticals.

“They have a very good strategy to create high-tech, advanced capability in the island,” Di Perna said.

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Singapore’s aerospace industry generated S$8.7 billion and employed 19,800 workers in 2013, according to the latest EDB data. The industry has expanded at an average of 10 percent in the past two decades, according to the economic agency. By comparison, the nation’s gross domestic product has expanded by an annual average of 5.3 percent in the two decades through 2015, according to data compiled by Bloomberg.

There have been some recent challenges for Singapore. The maintenance arm of Lion Air, a key customer for Airbus and Boeing in Southeast Asia, is spending $250 million to build a maintenance facility at Batam, an Indonesian island just a short ferry ride from Singapore. It will have the capacity to service four Boeing 747s or 12 single-aisle planes.

Rolls-Royce chose to open its customer-service center at the Seletar park because about 20 percent of its large civil-aircraft engines are in use in Asia, the company said.

“The government is extremely focused on a chosen endeavor and is nimble enough to embrace the ripple effect,” the London-based company said in an e-mail. The city-state is rated by the World Bank as the globe’s easiest place to do business.

It also has strong intellectual-property protections, said Alastair Fallon, an analyst with the U.K.-based consultancy International Bureau of Aviation.

“Engines are politically sensitive technology, and Singapore is a better place geographically in Asia for engine makers to base their factory operations other than their home countries,” Fallon said.

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