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Singapore. Singapore’s status as a leading aviation hub entered a new phase yesterday with the opening of a $700 million facility by Rolls-Royce.

It is the global engine giant’s largest facility in Asia, and the first outside its home in the United Kingdom, to manufacture engine fan blades, plus assemble and test large commercial jet engines.

The campus at Seletar Aerospace Park spans 65,000 sqm, will add 500 highly-skilled jobs to the economy — nearly all of them going to local people — and is expected to contribute about $1.7 billion, or 0.5 per cent, to Singapore’s gross domestic product (GDP) by 2015.

Yesterday, Prime Minister Lee Hsien Loong said Rolls-Royce’s decision to site the facility here is testament to what Singapore has done right in developing what he calls a “strategic” industry that currently contributes more than 3 percent to the country’s GDP.

“Rolls-Royce could have sited this campus anywhere in the world,” he said, at the official opening of the Rolls-Royce Seletar Campus.

“But choosing Singapore reflects their confidence in our workforce and in our future... Singapore will do our part to help the campus succeed, and make this partnership flourish,” he added.

But looking ahead to the opportunities and challenges on the horizon, PM Lee said Singapore has to keep abreast of changes to maintain its edge.

One, it will continue to educate workers and develop a highly skilled workforce.

Two, it will strengthen its pro-business environment to suit the industry’s knowledge-intensive nature.

Three, it will improve its air links with the rest of the world to ensure the smooth flow of business.

He made these pledges as he underlined the aviation industry’s importance to Singapore.

Besides its contribution to GDP, the industry has also created more than 19,000 jobs, many well-paying and taken up by Singaporeans.

Also, Asia’s aviation industry is projected to boom, with its fleet of aircraft expected to triple in the next 20 years, he added.

But challengers are emerging: “More cities are striving to do the same, in China and in the Middle East. Technological progress like longer-range aircraft and the rise of low-cost carriers may change the industry structure and the pattern of global flights in unpredictable ways,” Lee said.

Thus, Singapore “must stay abreast of these changes” by developing a highly-skilled workforce to do high-value, complex work.

It also needs to improve the laws to protect intellectual property and grow its research and development landscape to give companies the confidence to make long-term investments here, he added.

In his speech, Lee recounted the initiatives Singapore had taken over the decades to position itself in the industry, be it developing the world-class Changi Airport, setting up the iconic Singapore Airlines, or advocating liberal, open-skies policies.

He hailed Rolls-Royce’s investment as a “landmark” project that will see Singapore play a ‘key role’ in supplying engines for the latest jets, such as the Airbus A380 and Boeing 787 Dreamliner.

The facility can produce 250 jet engines a year and the first one will be shipped in the third quarter of this year to Toulouse, France, where Airbus planes are made.

Rolls-Royce chairman Simon Robertson said it chose Singapore for the facility to get closer to its Asian customers.

Other factors he cited included the well-educated workforce and the Government’s “long- term approach” in creating conditions for advanced manufacturing.

Sir Simon also noted that Asian demand has helped the company double its business in the last decade, and has made it confident it can double its revenue in the next.

Rolls-Royce’s revenue for 2011 was £11.1billion (S$22 billion).

The company expects to hire 500 more employees, of whom 80 to 90 per cent will be Singaporeans or permanent residents.

Around 200 have been hired so far.

Among the newcomers is Kenneth Koh, an engineering graduate from Nanyang Technological University.

Hired last May, the 25-year-old was flown to Britain for a three-month course to ensure that instructions for making fan blades here are in sync with those at the Barnoldswick factory, which uses different machines.

“I got to learn from British engineers who have been on the job for 20 to 30 years,” he said.

Reprinted courtesy of Straits Times Indonesia. To subscribe to Straits Times Indonesia and/or the Jakarta Globe call 021 2553 5055.