Rolls-Royce to build on co-operation with China

John Rose, Chief Executive of Rolls-Royce plc, today (26 October 2001) underlined Rolls-Royce's commitment to developing long-term relationships with customers and co-operation partners in China.

Friday, 26 October 2001

"China is an increasingly important market for Rolls-Royce. China's requirements for civil aircraft and marine systems are growing, and there are major plans to increase the use of natural gas as a clean fuel." said Mr Rose in Shanghai."

Currently, Rolls-Royce engines power eight airlines in mainland China, with over 200 engines in service with thrusts from 15,000 to 60,000lb. The fleet comprises Boeing 757s, Boeing 767s, Embraer ERJ145s, V2500-powered Airbus Industrie A320/A321s, and MD90s.

Recent successes include the China Eastern Airlines order for Rolls-Royce Trent 500 powered A340-600 aircraft, first delivery of which will be in 2003. The RB211-535E4 powered Tu204 freighter aircraft has been ordered by China Southwest and China Northwest ,and China Southern has ordered ERJ145 regional jets powered by the Rolls-Royce AE3007.

"As a measure of our long-term relationship, we are celebrating with China Southern one million hours of operation of the 535E4 in the Boeing 757 aircraft. We are very proud of the strong relationship we have built up and look to the future together with pride and confidence," said Mr. Rose.

On Rolls-Royce marine business, John Rose said, "China is growing in importance as a ship-building nation, building increasingly sophisticated vessels for domestic and foreign owners. Rolls-Royce is now the world's number one supplier of marine power systems.

"Our office in Shanghai, which works with China's ship-building industry, has been growing our marine business in China by more than 20 per cent annually in recent years. The business includes gas turbines, diesel engines, propellers, water jets, rudders, steering gear and deck machinery."

In energy, John Rose said: "The West East natural gas pipeline is an exciting project. It demonstrates the determination of the Chinese authorities to develop the west of China, and to meet the increasing demands in China's cities for higher environmental standards. Increasing use of natural gas is clearly an important part of this strategy. Therefore there are opportunities for gas turbine driven pipeline compressors, in which Rolls-Royce is a world leader, and also gas turbine power stations.

"These aero-engine, energy and marine businesses are all centred on our core gas turbine technology and capability. I believe that as we develop our business in China, at the same time we also will be developing our industrial and technological co-operation on gas turbines with our Chinese partners.

"We have a strong foundation to build on, including a joint venture in Xian with Xian Aero-engine Corporation, making turbine parts. We also have subcontract manufacturing with the major aero engine companies in Xian, Chengdu and Shenyang.

"We are also excited about the engineering research co-operation which we are undertaking under our Joint Engineering Team (JET) agreement with AVIC I and AVIC II . China has bright young engineers, who, I believe, are benefiting from working with us. Some of the projects under JET are related to the Advanced Regional Jet which AVIC I are working on."

During his visit John Rose met Vice Premier Wu Bang Guo, who expressed his satisfaction with Rolls - Royce's cooperation with China and encouraged its further development. He also met PetroChina, CAAC, Air China, China Eastern. China Southern and Shanghai Airlines. He discussed current cooperation and opportunities for the future with COSTIND, AVIC I and AVIC II.