ST Engineering's aerospace arm and Vietnam Airlines Engineering (VAECO) have incorporated a joint venture company which will provide MRO services to the Vietnamese flag carrier and meet growing regional demand.
The move follows a memorandum of understanding VAECO and ST Engineering signed in April last year, and is ST Engineering's first foray into the Vietnamese market.
The new company, Vietnam Singapore Technologies Engineering Aerospace, is likely to start operations in the middle of year, with bases at Hanoi Noi Bai Airport and Ho Chi Minh City's Tan Son Nhat Airport, says ST Engineering.
There will be investment into new infrastructure at both airports, the group adds. It will be equipped to support the Airbus A320 family, the A350, and the Boeing 787. Additionally, the facilities will also be used to conduct MRO work on pneumatics, hydraulics, electrical components, wheels and brakes, and safety equipment.
The joint venture was set up with paid-up capital of $3.9 million. ST Engineering will hold a 49% stake in the joint venture and VAECO the remainder.
Lim Serh Ghee, the president of ST Engineering's aerospace arm, says its presence in Vietnam will help the company "better capture" rapid growth 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," Lim adds.