With a depth of capabilities and a reputation for technical, Strand Aerospace Malaysia is involved with cutting‐edge aircraft programmes and an established engineering services supplier. Managing Director Mr. Naguib Mohd Nor talks to United World about the company’s goal to become the leading engineering services provider in the region. The ASEAN Economic Community will be established in 2015. What do you think its impact will be on the aerospace industry?
From our industry’s point of view, which is the engineering services industry, the single market will provide new opportunities to expand the provision of services to the region. Our company is different from others in the region. Generally in ASEAN you have “build to print” businesses, where European companies send their designs to the region to be done. So normally companies in the region do not require engineering capability. Our core strategy is different. We have engineering capabilities and other companies can take advantage of our expertise in order to improve their products through our design and analytical services. This is our opportunity in the region. Moreover, we have transferable skills beyond aerospace; we can transfer our know-how to oil and gas, infrastructure, transportation, and also real estate and construction - given the latest emerging demand in energy-efficiency, for instance.
Do you think that Malaysia can become a hub for aerospace?
Well, that’s exactly what we are looking at right now. We are actually developing Malaysia’s aerospace hub, the Asia Aerospace City (AAC) in Subang. The AAC concept was developed by MARA alongside the Government in order to provide a combination of industry and education. In this area we will have both an aerospace university, which is owned by MARA, and companies developing products and services for the aerospace industry, such as Strand for instance.
So the idea is to create a nexus in the heart of Kuala Lumpur to provide high-end knowledge services for aerospace, this is the innovation we bring to the market, and this is a major growth area within ASEAN. With this strategy in mind, high-skilled capital becomes the essential ingredient. MARA itself produces approximately 5,000 engineers per year. We will be able to capitalise on the manpower that is not being used yet. We aim to develop high-skilled human capital with the right knowledge to create wealth for the nation while helping us develop the industry.
Much of what Strand does today is support the design of products that are not manufactured in Malaysia. What this means is that we are already engaged with developed countries and we are able to attract these highly sophisticated businesses here because we can provide the right level of skills, cost-efficiency and in the longer term access to new markets. We have launched our first “apprentice style” programme in collaboration of Glyndŵr University in Wrexham. This university is very near to Airbus Broughton where Airbus wings are made. Our objective is to send our students there and then when they come back they bring knowledge that can be applied to our local industry.
I worked for several years as an engineer and then finally became General Manager of Strand UK. We used to service several OEM Tier 1 companies. At some point Airbus communicated to the supply chain that they were looking for work to be done in companies located in emerging markets. That is when we saw the opportunity to set up Strand Aerospace Malaysia in 2006. This has been a pretty successful journey so far. It is an example of how UK companies can expand into Malaysia and grow bigger. Undoubtedly, the move of Strand into Malaysia made the company more competitive in the global market.What is the role of Strand Aerospace Malaysia in driving the economy from an industrial base to a knowledge-based society?
Strand Aerospace Malaysia is part of the government’s Economic Transformation Programme (ETP). And by that I do not only mean that we are instrumental to the overall policy, but that we are specifically mentioned within the programme. Strand Aerospace has been identified as a case study of excellence in the provision of engineering services in the Entry Point Project (EPP) 5 “Nurturing Pure-Play Engineering Services.” So we can easily say that we are fully integrated within the government’s strategy and vision.
We’ve been growing steadily and organically. In 2010, we were 15 people and we are now 150. This considerable jump has happened thanks to the government support we received not only in terms of funds but also in other areas. For instance, the government also supported us with marketing our products and services. Because of the nature of our business we didn’t have the expertise on doing this by ourselves. Therefore, we were able to differentiate our brand and bring in new business. For a small company of 15-20 people it was very challenging to penetrate large and competitive European markets. But thanks to the support of the government in creating links and contacts within relevant companies, I had the opportunity to show directly our products and capability.
How did you manage to strike a balance between high quality and cost efficiency?
Human capital is the key to our success. We impart knoweldge and experience to our employees via our experienced engineers in Strand UK and Malaysia. We do not hire purely based on academic qualification; but assess people based on their ability to learn fast and be efficient. Malaysians traditionally study many years but have little opportunity to practice. We are going to change this paradigm for the aerospace industry. In our industry time is crucial; there is no room for mistakes.What type of collaborations do you have with TalentCorp?
Attracting experienced entrepreneurs helps bring back students or executives that live abroad. Having a real case helps them encourage people to return. Malaysians love their country, we need to find them the right job or create the right business climate in order to provide them with a platform for success. What are Strand Aerospace Malaysia’s competitive advantages?
One of the competitive advantages that we have is that we truly understand the problems of our clients and can deliver the right solution. There are several cases of success with clients in Europe and Asia in which we were able to assist them efficiently. How are you planning to expand your business portfolio?
In the medium term we want to increase the offshoring of aerospace engineering services work to Malaysia. In the mean time we are also diversifying into other engineering sectors such as oil and gas, rail, automotive and IT. This will ensure that we are able to support the growing opportunities in the region and truly make Malaysia the gateway for business in ASEAN. What is the role of Strand Aerospace Malaysia in bringing the UK and Malaysia closer? Are you currently working on new partnerships with British companies?
Strand can be the bridge between the UK and Malaysia but also ASEAN as a whole. Once you do business in Malaysia you’ll be able to branch out in other countries because here we have different cultures and we are very focused on the ease of doing business. I believe that especially with the establishment of the Asia Aerospace City, Malaysia will be able to work in partnership with global companies to capitalise on the high technology that they bring to and develop in Malaysia to pursue new business opportunities. Often, because of the lack of a link between the supplier and the clients, many foreign companies were only able to make a single deal with no long-term strategy. For instance, we have several different types of Military aircrafts here in Malaysia that come from different countries, including the UK, US, Italy and Russia. This is expensive in terms of maintenance but also means that no one company is able to provide long term strategic solutions which was probably due to the shortage of engineers of the right level of knowledge and skill to support such solutions. So we are developing the necessary high-skilled human capital able to support such solutions in partnership with the OEM.
BAE Systems, for example, has very well understood the importance of having a long-term perspective in Malaysia, rather than a hit-and-run sort of approach. BAE is helping us in the training of our staff and coaching us in how to empower our people through our programme at Glyndŵr University. They tried doing apprentice programmes here but it was tough for them. Strand and MARA somewhat simplified their work in this sense. We have mutual support in terms of HR training. How do you imagine your country in ten years?
In ten years Malaysia will become the gateway for technology within ASEAN and beyond. Malaysia will be the one-stop technology solution provider. In order to take Malaysia to the next level, human capital is essential and the government, GLCs, and the private sector have been investing enormous financial resources in this area. We are already a human capital provider for the region and also beyond. If you look at the aerospace sector, a large number of Malaysians are employed in the Middle East for example. So, the next ten years will be crucial for us and I am certain we will be able to capitalise on all our investment in human resources.