Rolls-Royce expands global capability

Tuesday, 20 November 2007

Rolls-Royce today announced plans to invest in two new aero engine facilities in Singapore and in the Commonwealth of Virginia in the United States. The Company had previously announced that it was considering possible locations in Asia and the US.

Over the last decade, Rolls-Royce has established a strong position in global markets. In the light of this success, the Company is investing in new capability in order to meet the increasing needs of its global business and its growing customer base around the world.

The decision to locate the new facilities in the US and Singapore has been driven by three strategic considerations: the attractions of locating major facilities close to customers in two of the largest and fastest growing aerospace markets in the world; the business continuity benefits that will arise from locating the assembly and test of Trent engines on two continents; and a reduction in the Company’s exposure to the dollar.

Sir John Rose, Rolls-Royce Chief Executive, commented: “These latest investments in world-class facilities are further evidence of our success in aerospace markets and the continuing trend towards the globalization of our operations. They also build on our existing international presence and relationships and will bring us closer to key customers in Asia and the US.”

Rolls-Royce has become a global company, with 45 per cent of its Research and Technology, 40 per cent of its employees and 50 per cent of new programmes, already located outside the United Kingdom. At the same time, the Company has maintained its commitment to the UK and over the last five years, has invested £837 million in UK capital projects, which accounts for 80 per cent of its worldwide capital investment over this period.

The total investment in these two new facilities, which amounts to £150 million over the next five years, will comprise two elements:

Singapore

In the light of the Company’s success in the modern wide-body aircraft market and the need to develop increased capacity, Rolls-Royce will build a new facility in Singapore to assemble and test large civil engines, starting with the Trent 1000 for the Boeing 787 and the Trent XWB for the Airbus A350 XWB. Together with its existing UK facility in Derby, this will provide the Company with a dual sourcing capability for the assembly and test of large civil engines, including future new versions of the Trent engine.

The Company’s Derby facility is planned to remain the centre of expertise for large civil engines, with the capability to design and develop these engines. It will also continue to assemble and test the Company’s portfolio of large civil engines.

The new facility will be located in an Aerospace Park at Seletar in the north of Singapore and will be fully operational by the end of 2009. It will employ up to 330 people depending on customer demand and will receive support from the Singapore Economic Development Board.

The establishment of this modern “factory of the future” represents an important step forward in the development of the Trent programme and in the Company’s wider relationship with Singapore.

Commonwealth of Virginia

The new facility in the Commonwealth of Virginia will assemble and test the RB282, the engine selected in June by Dassault to power its new super midsize corporate jet and potentially the first in a family of small engines for the corporate and regional jet market. More than 90 per cent of corporate aircraft are manufactured in the US, which is today the most significant market for these products.

The development and production proving programmes for the RB282 will be undertaken in the UK at recently completed facilities in Bristol.

The new facility in the Commonwealth of Virginia will also have the capability to undertake blisk manufacture for the F136 engine for the Joint Strike Fighter (JSF). It will also provide the Company with options for future advanced manufacturing activities as opportunities arise.

The new facility will be located at Prince George County, Virginia and will be fully operational by the end of 2009. The Commonwealth of Virginia and Prince George County will provide economic incentives to support the project. This investment builds on the Group’s strong presence in North America and over time is expected to create around 500 jobs in the Commonwealth of Virginia, assuming the F136 programme proceeds to volume production.

  1. Rolls-Royce, a world-leading provider of power systems and services for use on land, at sea and in the air, operates in four global markets - civil aerospace, defence aerospace, marine and energy. It invests in core technology, capability and infrastructure that can be applied across these sectors to take a competitive range of products to market. These investments create high barriers to entry.
  2. Rolls-Royce is a global company. It employs 38,000 people across 50 countries, with 15,000 or 40 per cent located outside the UK. Of its firm and announced order book of £35 billion at June 2007, around 90 per cent relates to orders secured outside the UK.
  3. The Company now has a total of 54,000 gas turbines in service worldwide, which generate demand for high-value services throughout their operational lives. It has a broad customer base comprising 600 airlines, 4,000 corporate and utility aircraft and helicopter operators, 160 armed forces, more than 2,000 marine customers, including 70 navies, and energy customers in 120 countries.
  4. Rolls-Royce has a 49 per cent share of the modern wide-body commercial aircraft market, with its Trent engine having been selected to power a broad range of new civil airline programmes, including the Trent 900 on the Airbus A380, the Trent 1000 on the Boeing 787 and the Trent XWB on the Airbus A350 XWB.
  5. Rolls-Royce is the leading provider of engines for today’s business jets, with a 34 per cent share of the market. The number of business jet applications powered by Rolls-Royce, including joint-venture engines, has increased from one to 13 over the last decade. The Company and its partners now power the world's fastest, longest range, largest and lightest business jets, plus a corporate jetliner. They include aircraft built by Airbus, Bombardier, Cessna, Embraer, Gulfstream, Raytheon and Sino Swearingen.
  6. Rolls-Royce is a key team member on two aspects of the US Joint Strike Fighter (JSF) programme, as a 40 per cent partner on the alternate engine (F136) with General Electric and separately as a key partner providing the vertical lift components for the short takeoff and vertical landing (STOVL) variant.
  7. A blisk is an engine component composed of a rotor and a blade, which has been machined from a solid piece of material.

North America

  1. Rolls-Royce is a significant and growing player in North America. The Company currently employs nearly 8,000 people across the US and Canada. North America is home to the global headquarters for several Rolls-Royce businesses including Corporate & Regional Aircraft, Defense North America, Helicopter Engines and Energy. Each year, Rolls-Royce businesses and operations in the region generate more than $3 billion in sales and to date, the company has invested over $1 billion in the US.
  2. The US Department of Defense is the Company's largest government customer worldwide. Rolls-Royce is on four of the top eight aviation programs in the US President's budget - the Joint Strike Fighter (JSF), the V-22, the C130-J and the E-2. Rolls-Royce powers more than 2,800 fixed and rotary-wing aircraft currently in service with all branches of the US Armed Forces. Rolls-Royce also provides propulsion systems for two leading-edge US Navy programs. It is supplying MT30 gas turbines, part of the Trent engine family, for the Littoral Combat Ship and the DDG-1000 destroyer.
  3. Recent US contract announcements by Rolls-Royce include: a $500 million contract for the Joint Cargo Aircraft; contracts worth over $300 million for Adaptive Versatile Engine Technology (ADVENT) and the Highly Efficient Embedded Turbine Engine (HEETE); continued funding for the GE-Rolls-Royce Fighter Engine Team's F136; a $700 million production contract for the AE1107C-Liberty engine that powers the V-22 tiltrotor aircraft for the US Navy and US Marine Corps; and a $66 million renewal of an engine services contract for the F405 engines on the US Navy's T-45 training aircraft.

Singapore

  1. Rolls-Royce is already a major player in Singapore’s aerospace industry, accounting for over ten per cent of the country’s aerospace output. Singapore Airlines (SIA) has been a major Rolls-Royce customer for Trent engines since 1995 and BOC Aviation, formerly Singapore Aircraft Leasing Enterprise (SALE), Silkair and all the budget carriers operating out of Singapore use the V2500 engine for their A320 fleets.
  2. Through the company’s joint ventures with key local industry partner, Singapore Airlines Engineering Company and activities in the Energy and Marine sectors, Rolls-Royce currently employs over 1,000 people in Singapore. It also accounts for approximately five per cent of the total aerospace industry workforce.
  3. Rolls-Royce has established relationships with Singaporean suppliers and manufacturers, including the sub-contracting of aero-engine component manufacture to Singapore Aerospace Manufacturing (SAM), a subsidiary of Accuron Technologies.
  4. Rolls-Royce is also engaged in research and development activities in Singapore. Together with the Singapore consortium Enertek, the Company is investing US$100 million in developing a commercially viable power system based on fuel cell technology.

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