Smaller aerospace suppliers slow to diversify into Asia

Singapore
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Even though some aircraft-makers have established manufacturing plants in Asia, many aerospace suppliers - particularly small to medium-sized enterprises - have been relatively slow to follow suit.

Major suppliers have been establishing manufacturing businesses in Asia but "for the smaller players it is difficult for them" and in some instances "it is almost impossible", says Accenture aerospace & defense practice executive director Damien Lasou,

To establish manufacturing elsewhere involves a lot of capital, he says, adding that "some of these companies have less than 50 employees and they are manufacturing very specialised parts."

Lasou says some smaller aerospace companies in Toulouse have been "grouping themselves and then going to Asia to speak to people and try and globalise their business".

Suppliers that establish operations in Asia can benefit from a lower cost base and can participate in new supply chains that aircraft-makers are establishing in Asia, he says.

The establishment of Airbus and Embraer's aircraft manufacturing plants in China, for example, has created opportunities for Chinese suppliers, he adds.