This article first appeared in The Edge Financial Daily on May 16, 2017 - May 22, 2017

MELAKA: DRB-Hicom Bhd’s 96.87%-owned unit Composites Technology Research Malaysia Sdn Bhd (CTRM) is expecting to breach the RM1 billion revenue mark by its financial year ending March 31, 2019 (FY19).

At a media briefing yesterday, CTRM group chief operating officer Shamsuddin Mohamed Yusof said the growth will be mainly driven by the transfer of French aircraft manufacturer Airbus’ A350 independent fan cowl manufacturing line in Chula Vista, the US to CTRM’s plant in Melaka.

Fan cowl is one of the exterior components of an aircraft engine.

“Both Airbus and CTRM plants are having seven shipsets per month now, they are doing half of it and the other half is being done by us, so they are phasing out and we are phasing in. The revenue of this business is about RM27 million to CTRM now,” he said.

“So we will do everything here, all seven shipsets by October this year after Airbus moves their fan cowl manufacturing line here. Then, we will increase to nine shipsets a month, that is about RM107 million [in] revenue. We hope to go up to 13 shipsets a month, in two to three years’ time, [that’s] about RM174 million sales,” he added.

For FY17, CTRM’s revenue grew 5.77% to nearly RM855.22 million from RM808.58 million. Moving forward, Shamsuddin said he is expecting a 4.5% revenue growth per annum over the next two financial years to beyond the RM1 billion mark due to the transfer programme.

Because of the additional works and rising market demand, it is also investing RM93.4 million to expand its manufacturing facility, by adding one more building to its five-building facility here now, to be completed next February.

“We are in a growing industry, not only is there a substantial growth market for us to capture, there is also a huge replacement market as well, so we have to build our capacity and capability now,” he added.

CTRM currently has an order book of RM11.9 billion, which will keep it busy until 2035. So far, Shamsuddin said about 70% of CTRM’s sales are related to Airbus, of which 9% are done through direct orders, while the remainder come from Airbus’ tier-one suppliers like Spirit Aerosystems Malaysia Sdn Bhd and UTC Aerospace Systems.