AIDC outlines goals for new strategic alliance 2016-06-09

AIDC said that the sector needs to form a united front to contend for larger orders from major international clients such as Airbus Group and Boeing

Aerospace Industrial Development Corp (AIDC, 漢翔航空工業), the nation’s largest civilian and military aircraft manufacturer, yesterday outlined its goals to yield cost and capabilities gains across the domestic supply chain to vie for a bigger share of the immense global aerospace market, through a large-scale strategic alliance.

Dubbed “A-Team 4.0,” the alliance is a concept envisioned by AIDC chairman Anson Liao (廖榮鑫) in a bid to foster closer vertical integration across the domestic aerospace supply chain by matching demand and capabilities of each participant to further elevate cost efficiencies. The company has also set its sights on lowering material costs through tighter cooperation among local companies, which erodes about half of the sector’s profits.

AIDC has arranged meetings between major international clients and suitable Taiwanese manufacturers, in the hope that they might meet the required certification.

Through such meetings, Formosa Plastics Corp (台灣塑膠) and UHT Unitech Co (永虹先進材料) were able to showcase their capabilities to major clients, such as US-based Cytec Industries Inc and Argosy International Inc, opening doors to new contracts for carbon fiber materials, AIDC said.

“The sector must form a united front to contend for larger orders from major international clients such as Airbus Group SE and Boeing Co, instead of efforts by disparate companies clawing at scraps,” AIDC procurement department director Jennifer Chuang (莊秀美) told a news conference at the Taiwan Stock Exchange.

AIDC has also introduced relevant suppliers to Rolls-Royce Holdings PLC, one of the world’s leading aircraft engine makers, Chuang added.

AIDC’s call to arms has also led to the discovery of a little-known local aluminum panel maker, which has been supplying the world’s top clients, Chuang said, adding that the company has been given a role in the alliance.

She said that Taiwan’s aerospace industry is facing unprecedented challenges from both rivals backed by advanced automation in developed economies, as well as low-price offerings by new entrants in developing markets, while major clients have continued to demand further price cuts on manufacturing contracts.

The alliance encompasses 220 of the nation’s top aerospace companies, including manufacturers; machine tool makers and vendors; materials suppliers; information technology companies; and researchers, as well as two state-run banks — Bank of Taiwan (台灣銀行) and Taiwan Cooperative Bank (合作金庫) — to provide financing.

The company reported that sales rose 7.74 percent annually in the first five months of this year to NT$11.3 billion (US$350.66 million).