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ST set for Chinese heavy maintenance JV (July 21 2010)

ST Aerospace has signed a joint venture agreement with Guangdong Airport Management Corporation (GAMC to set up a heavy maintenance facility in Guangzhou, China.

ST Aerospace (Guangzhou) Aviation Services Company Limited, as it will be known, will have a total investment of US$99m. ST Aerospace will own a 49% stake of the JV company, while GAMC will own 51%.

ST says the venture has been endorsed by the Civil Aviation Administration of China (CAAC) but is subject to the approval from the Chinese government.

If all goes to plan, the facility will begin operations two years after incorporation. Construction of the facility will take about two years to complete.

Located within the Guangzhou Baiyun International Airport, the venture will occupy an initial area of 147,000 square metres, which will be adequate for two hangars.

Each hangar will be able to accommodate two wide-body aircraft. The JV company will provide maintenance and modification services for Boeing and Airbus aircraft, and it expects to employ an initial work force of about 500-600.

“The establishment of the JV company in Guangzhou shows the level of commitment that ST Aerospace has to serve the Chinese market. Given their excellent reputation in providing dependable, cost-effective services and quick turnaround times, we are delighted to have ST Aerospace as a partner, as we continue to strive towards building a global aviation hub,” said Liu Zi Jing, President, Guangdong Airport Management Corporation.

“We are pleased to have the support of Guangdong Airport Management Corporation, as well as the local government. Guangzhou is a major aviation hub in Asia, and is very well connected to the rest of the region as well as other major aviation hubs in China. We hope to build a strong capability to provide high quality and reliable services for our global customers who operate in and fly into China.”