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When it comes to bragging rights for cutting-edge developments in the aerospace business, Singapore can shout louder than most.

In the past two years, the world’s two leading makers of airliner jet engines – and the sophisticated technology that goes into one of their key components, fan blades – have invested heavily in manufacturing facilities in the city-state.

Like many, they picked Singapore as it offers a relatively low corporate tax rate (at a basic 17 per cent), a stable political environment and predictable and transparent regulations. The government has used these assets to attract investment in a series of strategic sector “hubs”, of which aerospace is one.

In 2006, that effort moved into high gear when work started on converting Seletar airport on the island’s eastern edge – once a Royal Air Force base – into what is now the 320-hectare Seletar Aerospace Park.

In February 2012, Rolls-Royce opened a campus there, where the UK-listed company is assembling its Trent series of engines outside Britain for the first time. The facility also produces titanium fan blades that the company says allow a weight saving of almost a third over conventional fan blades. The rapidly rotating components, which propel a tonne of air per second through the engine, have to be both strong and light.

US rival Pratt & Whitney a year later broke ground on facilities – also at Seletar – that will make fan blades from 2015, as well as high-pressure turbine discs the next year.

With a combined investment of $810m – the bulk of which is being made by the UK company – the two developments underscore how rapidly Singapore has become a global manufacturing hub for the aerospace industry.

The city-state also accounts for a quarter of Asia’s maintenance, repair and overhaul of aircraft and components, according to the country’s Economic Development Board.

Singapore’s initiative has been a calculated bet on the growth of aerospace in Asia, which is predicted by analysts to account for one of every three new aircraft deliveries by 2020.

“The growth in the customer base is in Asia and that’s influenced our thinking on where we invest,” says Jonathan Asherson, Rolls-Royce’s Singapore-based regional director for countries in the Association of Southeast Asian Nations (Asean) and the Pacific.

Singapore has also benefited from the push by manufacturers to develop more fuel-efficient engines – hence the investments at Seletar by Rolls-Royce and Pratt & Whitney. While the former has had a presence in the island nation since the 1950s, the company only began manufacturing there in 2012.

Similarly, while Pratt & Whitney has a 30-year record in Singapore, the Seletar facility will be the first time it will be making engines in the city-state. This will also mark the first time that Pratt & Whitney will make hybrid fan blades for the company’s new-generation geared turbofan (GTF) engine outside the US.

The British company’s facility is operating at 20 per cent of its capacity with production of Trent 900 engines, which power the Airbus A380 aircraft. It will add production of the Trent 1000 – fitted to the Boeing 787 Dreamliner family – by midyear.

By 2016 Seletar is set to produce 250 Trent engines, representing half the company’s projected annual demand for 500 engines over the next six to seven years. The other half of that demand will be supplied by Rolls-Royce’s Derby plant in the UK.

In Singapore, the supply of qualified workers has been crucial. About 90 per cent of Rolls-Royce’s employees are locals. Most of the technicians and assembly workers at Seletar are hired straight out of the government-backed Institute of Technical Education, which has 25,000 students in vocational training at any one time.

One effect for Rolls-Royce of committing itself to making sophisticated engines and parts in Asia is that its suppliers have been following it east, and others have been found within the region.

“From a supply chain perspective, these investments have not gone unnoticed,” says Mr Asherson.

RLC Engineering Group, a company based on the UK’s Isle of Man that makes titanium alloy that goes into fan blades, is setting up a facility next to Rolls-Royce’s in Seletar.

“They [RLC] won’t have the international footprint or experience, necessarily, but they need to expand because we are [expanding], so we’ve been able to work with them,” says Mr Asherson.

Rolls-Royce continues to use Japanese suppliers that for some years have been supplying parts for engines made at its Derby facility.

But it is also using suppliers in southeast Asia, including Leistritz of Germany, which has manufacturing facilities in Thailand. There are also “three or four” suppliers locally in Singapore. “That’s going to grow, I think,” says Mr Asherson.

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