ANALYSIS: Taiwan's AIDC increases focus on commercial work

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Taiwan's Aerospace Industrial Development Corporation (AIDC) kept a strong presence at this year's Taipei Aerospace & Defense Technology Exhibition (TADTE), staged from 15-18 August.

While the state-owned aerospace firm is best known for its F-CK-1 indigenous defence fighter (IDF), its commercial business has grown increasingly important, now accounting for some 55% of its total business.

At this year's show, a section of its stand was devoted to the Mitsubishi Regional Jet (MRJ). It designed and will produce the slats, flaps, belly fairings, rudders and horizontal stabilising rotating blades for the new type. Two Mitsubshi Aircraft representatives were on hand to meet show attendees.

In an interview with Flightglobal Pro, AIDC's vice-president of commercial business development Gary Lo reveals that the firm is now moving towards privatisation, with an initial public offering on the Taiwan Stock Exchange scheduled for September 2014. The government, which will remain a majority shareholder, has also endorsed the move.

"Being a state-owned company, we face constraints such as the speed of capital investment and also manpower. Our aim is to generate an annual revenue of $1 billion within the next three years and to do this, we need to move forward," says Lo.

He adds that the firm is looking for 'strategic partners' and is in talks with engine-makers and airframers, players who could bring more business to AIDC if they become shareholders.

Being a state-owned firm also means that AIDC has its boundaries defined in Taiwan's stand-off with China, making it tough for the firm to be involved in Chinese projects and major international defence programmes.

Though it was invited to bid for the manufacture of flaps, slats, leading edge flaps, rudder elevators and belly fairings for the C919 narrowbody, Lo says AIDC did not actively pursue the project because of political implications. It is now indirectly involved through Honeywell, manufacturing composite APU components for the C919.

Forecasting that future aircraft programmes will increasingly use more composites, AIDC invested in a $70 million facility in 2009 to design, develop and manufacture composite parts for aircraft manufacturers. The plant started operations in late 2010 and does work for the MRJ. It produces shroud panels for the Embraer 190/195s and is involved in various other projects.

Once the MRJ kicks into full production, work for the programme will make up 20% of the factory's work, producing some six shipsets per month, says Lo.

Asked whether AIDC has considering manufacturing its own commercial jet, Lo says that though Taiwan has the technology and skills, unlike China, it lacks the market for an indigenous commercial aircraft.

"Our aim is to be more involved in other manufacturers' projects, to be a risk-sharing partner. We're already in talks with several players to secure our next project," says Lo.