ST Engineering's Aerospace Arm To Set Up Second Engine MRO Facility

Singapore, 23 December 2007 -- Singapore Technologies Engineering Ltd (ST Engineering) today announced that its aerospace arm, Singapore Technologies Aerospace Ltd (ST Aerospace), has signed a joint venture agreement with Xiamen Aviation Industry Co. (XAICO) to set up an engine maintenance, repair and overhaul (MRO) facility in Xiamen, China. The joint venture company - to be registered as "ST Aerospace Technologies (Xiamen) Company Limited" (STATCO) - will have a total investment of US$78m. ST Aerospace will own an 80% stake of STATCO, while XAICO will own 20%. XAICO is responsible for the overall planning and development of the 3.39km2 Xiamen Aviation Industrial Zone in Xiamen, China.

This agreement is not expected to have any material impact on the consolidated net tangible assets per share and earnings per share of ST Engineering for the current financial year.


STATCO will initially be equipped to provide MRO and total support services for the CFM56-5B and CFM56-7B engines that power narrow-body aircraft such as the B737, A318, A319, A320 and A321. The CFM56 engine family represents the largest installed base and potential after-market value globally; and has been a popular engine of choice for Chinese airlines.

Operated and managed by ST Aerospace as part of its global network of MRO facilities, STATCO will complement and enhance ST Aerospace's subsidiary, ST Aerospace Engines Pte Ltd, in Singapore. It will leverage on ST Aerospace's global customer base and enhance ST Aerospace's capability to provide Total Aviation Support. STATCO will operate out of the Xiamen Aviation Industry Zone, a civil aviation maintenance base located at the Gaoqi International Airport in the northeasten part of the Xiamen Island. It is expected to commence operations in 2009, and will eventually employ a workforce of up to 350 skilled engineers and technicians.

"We are pleased that ST Aerospace, a globally reputed aerospace MRO company, has decided to invest and build up aircraft engine MRO capabilities in Xiamen. This JV alliance is a strategic move for both parties. While it will strengthen ST Aerospace's global MRO footprint, the setup of STATCO will enhance the development of the industry in Xiamen, and continue to upgrade the skills and knowhow of manpower in the city." ~ LIU Xue Jun, General Manager, XAICO

"We are pleased to invest in Xiamen with XAICO to further enhance the broad range of aviation businesses that are already there through the build-up of an engine MRO. Xiamen has a strong aviation business base, and is a vibrant coastal city with established infrastructure and efficient communications. We look forward to building a world-class engines maintenance operation in Xiamen, China, through this initiative. STATCO will complement our other business in China, and enhance our global Total Aviation Support value proposition to customers. With two locations offering engine MRO for CFM56 engines, we aim to enhance the value we bring to our engine customers globally." ~ TAY Kok Khiang, President, ST Aerospace

Over the last two years, ST Aerospace has reinforced its global presence in the aviation MRO market with the acquisition of SAS Component Group A/S in Europe, setup of Panama Aerospace Engineering (PAE) in Panama and added overall hangar capacity in subsidiaries ST Aerospace Engineering (STA Engrg), ST Aviation Services Co Pte Ltd (SASCO) and Shanghai Technologies Aerospace Company Ltd (STARCO). The latest setup of this JV company will further bolster
ST Aerospace's global network of aviation maintenance and modification facilities in the Americas, Asia Pacific and Europe.

Source : Singapore Technologies Aerospace