SINGAPORE (June 6): ST Engineering’s Aerospace unit and Vietnam Airlines Engineering Company (VAECO), a subsidiary of Vietnam Airlines, have formed a 49:51 joint venture (JV) entity in Vietnam following a memorandum of understanding (MoU) signed in April last year.

Called Vietnam Singapore Technologies Engineering Aerospace, the JV company was set up with a capital of US$3.9 million ($5.3 million) to provide component maintenance, repair & overhaul (MRO) solutions.

It also establishes ST Engineering’s foray into Vietnam.

Through the JV, both ST Engineering and VAECO intend to invest in new infrastructure for carrying out component MRO work at Vietnam Airlines’ existing maintenance facilities.

Additionally, new component MRO facilities are expected to begin operations in mid-2019. They will be equipped to support aircraft types including the A320 Family, Boeing 787 and ATR72, and more – as well as carry out MRO work on pneumatics, hydraulics, electrical components, wheels, brakes and safety equipment.

“A presence in Vietnam, which enjoys double-digit growth in the air travel sector, will enable us to better capture that growth with an expanded MRO network in the region," says Lim Serh Ghee, president of ST Engineering’s Aerospace sector.

“Our partnership with Vietnam Airlines, which has existing maintenance facilities in the country, not only enables us to set up capabilities within a very short timeframe but also allows us to start operating with a ready base-load.”

Shares in ST Engineering closed 2 cents higher at $4.02 on Thursday.