NAICM to Meet Rising DemandThu, 01/12/2017 - 14:03
Almost 37,000 commercial aircraft, worth about US$3.7 trillion dollars, will be necessary by 2035, according to a 2015 Boeing forecast. Whether the global aerospace industry is ready to manufacture them is another question. “For the next five years, a global supply shortage of US$50 billion is expected,” says Eugenio Marín, CEO of TechBA Madrid-Montreal & TechBA Aerospace. “Mexico is in good position to absorb 10 to 15 percent of that shortage in the next 10 years.”
This represents a significant business opportunity for an industry that aims to export US$12 billion by 2020. The Mexican aerospace sector has been growing at an accelerated pace for the last 13 years, led by major international aerospace companies that saw in Mexico an opportunity to manufacture the same quality at more competitive costs. “For aerospace companies that invested five years ago, it is important to start upping the pace.” To achieve this, companies need to overcome a number of challenges. TechBA’s chosen path as a business accelerator for SMEs involves facilitating their entrance to the supply chain. TechBA is currently supporting 10 SMEs through various acceleration programs, explains Marín. “We help them create a road map to enter the sector.”
One of the recurring concerns in Mexican aerospace is supply chain integration, which is complicated by the lack of a strong supply base. One solution is for international companies to bring their suppliers to Mexico. Another is to raise the level of existing suppliers in the region to the requirements of OEMs and Tier 1 and 2s. “Many of these large OEMs are not willing to make the large investments necessary for supply chain development,” says Marín.
Initiatives like TechBA can help these suppliers improve as soon as possible. A pivotal role in the development of the supply chain falls on the shoulders of companies that support the growth and consolidation of local suppliers. TechBA was created by Mexico’s Ministry of Economy and FUMEC, a binational entity with an endowment from the US and Mexican governments.
With four offices in the US, two in Canada, one in Spain and one in Colombia, TechBA helps SMEs in many sectors, identifying value-added niches. TechBA also supports ProMéxico and FEMIA, contributing to a large study on supply chain integration and it provides feasibility studies for the Mexican Space Agency’s (AEM) technology transfer centers. AEM is creating centers across Mexico and is collaborating on a project with CONACYT to develop human resources and certification training in Sonora and Baja California.
Approximately 250 Mexican companies in the aerospace sector are working to obtain the certifications, human resources and infrastructure needed to achieve success. “About 50 percent of the sector has been working for over 10 years and those companies are well-positioned and fully certified. The rest have joined the aerospace boom in the past five years.” Barriers along the way, such as major aerospace companies requiring suppliers to provide strong production track records, causes setbacks. “OEMs and Tier 1s often look for companies that already have aerospace clients, complicating the entrance for newcomers. Furthermore, it takes companies four to six months to prepare for a bid.” These factors stall local SMEs and the consolidation of the supply chain. If suppliers are not ready to handle this workload, manufacturers send the work to competitive regions such as Turkey, Poland and Morocco.
SMEs that identify long-term opportunities and returns persevere but many excellent, quality companies give up.