Aircraft manufacturers such as Airbus and Boeing are trying to meet the high demand for their products in China. So is GKN Fokker, the multi-technology aerospace supplier – known for its aerostructures, aircraft wiring, engine systems and other solutions, that started sourcing parts and products in China twenty years ago. The recent set up of a framework for a joint venture with local partners will further strengthen the company’s position as a supplier and partner to Chinese aircraft manufacturers, as GKN Fokker Elmo’s VP Business Development explains to Club China.
Global air travel is growing, and it is definitely booming in China. The country’s air passenger traffic volume is expected to grow at an average annual rate of 6.2 per cent. Over the next two decades, China is expected to remain the world’s only trillion-dollar plane market, valued at $1.2 trillion (£912 billion).
These numbers mean significant opportunities for GKN Fokker, says Adriaan Leyte, VP Business Development of the company that in China is also known as Fokker Elmo. Leyte pays multiple visits per year to China to help steer the business to further growth. “We have been active in this market for over twenty years. For aerospace we have a production facility in the Beijing region and GKN Automotive has facilities in the Shanghai region. In Langfang near Bejing we produce electrical wiring interconnection systems that we sell to the aircraft manufacturers of the world.”
“Moreover, we expect that we will increasingly cater to Chinese manufacturers, that operate in an industry that currently experiences strong growth. We are obviously very keen on opportunities to be part of that growth. We intend to increase our presence and open up new production facilities in China.”
Project with Comac
One example of such an opportunity for GKN Fokker is a project with Chinese business jet manufacturer Comac, the Commercial Aircraft Corporation of China Ltd., based in Shanghai. “In a partnership, we are currently reengineering its ARJ21 aircraft to a business jet variety. GKN sister company Fokker Services, supports supports the conversion of the aircraft to fit the needs of VIP and business clients. We expect to embark on more aerospace programmes in the future.”
As far as Leyte is concerned, GKN Aerospace’s success will not stop there. There are other exciting developments in the Chinese aircraft market, Leyte insists. He indicates that GKN Fokker closely follows the further development of the CRAIC CR929, China’s long-range 250-to-320-seat wide-body twinjet airliner. “We regularly touch base in discussions with the manufacturer COMAC”, Leyte points out while adding that GKN is also involved in supplying and engineering systems and parts for the world’s – and Chinese – engine manufacturers.
The evident and often-asked question is about intellectual property, IP. Can IP be sufficiently protected in a joint-venture with Chinese partners? “We have been dealing with legal and protection questions for two decades now; I am convinced that IP can be well protected, with the proper consultation and preparation”, Leyte says.
Meanwhile, the company’s wholly owned new factory in the Beijing area – that went from 0 to 1,200 employees in the past three years – is mainly catering for its international customers such as Airbus, Boeing and Bombardier and for engine manufacturers like Rolls Royce, GE and Pratt & Whitney. “Manufacturing these parts and systems in China is a boost for these customers’ sales in China. Selling an aircraft to the Chinese is easier when production also benefits the local economy.”
Launch of joint-venture
GKN Aerospace’s cooperation with Comac has been a success, Leyte points out. “Our next step is the launch of a joint venture company with Comac,. The aim is to develop business further, more specifically in building large-structure parts for the Chinese aircraft industry. A major step for us in China. We are working together with our Chinese partner on the operational implantation of our cooperation, most likely by building a new factory.”
To Leyte, it is clear that the Chinese aircraft industry is a crucial growth market for companies such as GKN Fokker. “Both as customers for our systems and parts as well as development partners for future products. The Chinese are aware of the big growth potential and want to go full thrust with manufacturing – preferably with partners like GKN Fokker as their partner.”