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Aerospace Resource Guide: Singapore

 

Singapore Statistics

Summary
Market Entry

Current Market Trends

Current Demand

Main Competitors

Best Prospects
Subsector Focus: Helicopters

Barriers

Trade Events/Associations

CS Contact

Capital: Singapore
Population:
5.2 million
GDP USD
: USD 345.56 billion
Currency:
Singapore Dollars
Language
: English (official). Other spoken but unofficial Languages include Mandarin, Malay, Tamil and various Chinese dialects

Summary

The Asia Pacific aerospace industry has made remarkable strides over the past decade given the positive economic growth across the region. Singapore has become an industry leader by carving out its own niche market within the Asian aerospace industry. Singapore has become the region’s aerospace hub, a leader in aerospace maintenance, repair, and overhaul (MRO) services, and has promoted significant investment in research and development (R&D). Given Singapore’s strong position in the industry, and as it is home to many aviation base operations, incentives for American firms to enter the Greater Asia aerospace market have increased.

Market Entry


Many American exporters use agents or distributors to serve the Singapore and other markets in Southeast Asia. Finding prospective partners presents no problem. Singapore firms are aggressive when it comes to representing new products and usually respond enthusiastically to new opportunities. Most Singapore companies are open to joint venture proposals and many are interested in manufacturing under license.

Shipments to Singapore are generally made under letters of credit and sight drafts, depending on the exporter's preference and the extent of past dealings with the purchaser. Standard credit terms are 30 to 90 days. The foreign departments of most major banks are well equipped to provide service and advice on matters of foreign trading and credit.

Quotations should be on a C&F basis whenever possible. The prices given may be either in Singapore or U.S. dollars. Exporters making quotations in Singapore dollars should consult their banks for the prevailing exchange rate. Singapore uses the metric system, so it is often beneficial for price/quantity quotations to be prepared accordingly.

Current Market Trends


Despite the potential of the Asia Pacific region, several multinational manufacturers are limiting their presence in emerging markets in the region. This is because of the complexity of the aerospace manufacturing market, its regulatory issues, quality and safety requirements, and low manufacturing volumes. Other issues that have deterred OEMs from entering the industry include supply chain and operational inefficiencies and high component costs. Technology, price and after-sales service are the main selling factors in Singapore. However, prospective exporters to Singapore should be aware that competition is strong and that buyers expect good after-sales service.

Current Demand


Singapore’s aerospace industry revolves around MRO activities. With the expected growth in air traffic in the region, the demand for MRO services will also increase. MRO services will continue to support Singapore as the regional MRO services hub in an attempt to supply the increasing demand.

Singapore has become the region’s MRO Hub as a result of the Government of Singapore’s (GOS) specialization initiatives within the aviation industry during the 1990s. Emphasis on specialization has produced a significant level of aerospace research and development in Singapore and spurred growth of the aviation industry in the region. Major aerospace companies that have R&D facilities in Singapore include Boeing, Thales, Rolls-Royce, GE and ST Aerospace.

Singapore also has an established OEM market that is supplemented with an international supply chain for the aerospace industry. As a result, the OEM sector experienced close to a 14% Compounded Annual Growth Rate (CAGR) over the last decade. Products designed and manufactured in Singapore include: engine casings, engine gears, and valves to seat actuators, electrical power systems and galley equipment.

One of the recent positive developments within Singapore’s aerospace industry has been the announcement of the Air Cargo Express (ACE) Hub in Changi Airport’s free trade zone. Singapore is now the fourth busiest air cargo hub in Asia and the regional air cargo hub growth will only strengthen its position.
In order to support the future development of Singapore’s aerospace industry, a new aerospace park is being developed at the Seletar Aerospace Park (SAP) which will host a variety of aerospace activities including R&D and MRO services. The SAP is expected to contribute USD 3.0 billion value-added activities annually and create 10,000 new aerospace-related jobs by 2018.


Competitors


The aerospace manufacturing industry is facing strong competitive forces, and is forcing industry players to adjust their outlook for long-term growth. Rising oil prices has caused Western suppliers to look toward lower cost regions such as the greater Asia-Pacific region. Singapore’s connectivity and infrastructure make it an ideal location for aerospace companies to setup regional headquarters and distribution centers in the Asia-Pacific region.

Most major aerospace and aircraft parts and service providers are represented in Singapore. Some of the major aerospace corporations located in Singapore are: Rolls-Royce, GE Aviation, Boeing, Pratt & Whitney, Lockheed Martin, Raytheon, Lufthansa Technik, Messier-Dowty, Nordam, Rockwell Collins and Honeywell, as well as Embraer, Thales, and EADS. Embraer chose Singapore as its regional logistics and spare parts hub, and rotable support to their regional airline customers.

Rolls-Royce has established in Singapore its first hollow titanium wide chord fan blades (WCFBs) manufacturing facility outside the UK.

Singapore has expanded its manufacturing capabilities in high precision aircraft component and systems, and has a complete range of MRO capabilities for both passenger and freight aircraft. Singapore companies have also been successful in building on their capabilities in maintenance and overhaul, high precision engine components and systems, and have substantial R&D investments in repair development and engineering design.

Best Prospects


Singapore is the regional leader in aerospace maintenance, repair and overhaul. Hence, sales prospects for products and services related to aircraft repair and overhaul, such as repair equipment for landing gears and engines and fuel systems, and avionics systems are likely to remain strong over the next few years.

Subsector Focus: Helicopters


As one of the world’s busiest airports, Singapore is well positioned to expand its market share in the business aviation, regional training and asset management.

Barriers


There are excellent opportunities for U.S. firms to sell aviation equipment and systems to Singapore as the country is virtually a free port. There are no duties, taxes or tariffs for aviation related equipment from the U.S. The challenge is in competing with suppliers from around the world on prices and product quality.

Currently, American companies that wish to establish MRO facilities require approval from the U.S. Transportation Security Administration’s (TSA) Large Aircraft Security Program (LASP). More information regarding LASP and TSA security regulations and programs can be found at: http://www.tsa.gov/research/laws/regs/editorial_multi_image_with_table_0203.shtm.

All imported goods for local consumption are taxable under the Goods and Services Tax (GST), which is levied at 7.0%. Goods kept in the Free Trade Zone are not subject to GST, but will be charged if they are later released for local consumption.

The electrical power supply specifications in Singapore are 230 volts, 50 cycles, single phase and 415 volts, 50 cycles, 3-phase. American equipment for use in Singapore must conform to these electrical requirements.

Internationally recognized standards, such as those approved by the Federal Aviation Administration, are fully acceptable in Singapore. Questions relating to aviation standards and regulations should be directed to the Civil Aviation Authority of Singapore (http://www.caas.gov.sg).

Trade Events/Associations

Singapore Air Show 2016

February 16-21, 2016 | New Changi Exhibition Center, Singapore
http://www.singaporeairshow.com.sg

Singapore Airshow 2016 (SA2016) will be held for the fifth time in Singapore. The 2016 series will also incorporate an Unmanned Systems Pavilion and a Land Defense Pavilion to showcase advanced products and services in these two categories as well as best practices and market ideas for application in the aerospace industry. This will be an opportune time for U.S. aerospace and defense suppliers of equipment and services to introduce their wares to industry and military leaders who are expected to be present for the event.

Association of Aerospace Industries (Singapore)
http://www.aais.org.sg



U.S. Commercial Service Contact Information:


Ms. NG Haw Cheng
Commercial Specialist
Hawcheng.Ng@trade.gov
+(65) 6476-9037


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