China enters global aviation marketplace through acquisition
Chinese aerospace and mining firm Shaanxi Ligeance Mineral Resources (SLMR) is to pay around 410 million US dollars for British aerostructure components manufacturer Gardner Aerospace. The deal signals China’s entry into a highly competitive global aviation marketplace.
As an engineering giant, Gardner Aerospace has been the supplier of various famous companies -- including Rolls Royce and Airbus. For Gardner, the acquisition represents an opportunity to expand into the rapidly growing Chinese domestic market. The takeover came as the number of orders for China’s first large passenger jet, the C-919, reached 600.
For the Chinese owners, purchasing Gardner represents an upward vertical integration of their business as it diversifies. And the architect of the deal, SLMR chairman Zhang Zheng, is celebrating what he calls a marriage of mining -- minerals and the means of production.
“We mine very rare minerals that are essential for the production of airplane engines and turbine blades. So, we’ve expanded from just mining to producing those important parts of planes and now we are entering the aviation industry,” Zhang said.
Experts said that Gardner Aerospace would soon take its place in a Chinese market for planes that could total a trillion dollars over the next 20 years.
Nick Sanders, executive chairman of Gardner Aerospace, sees the acquisition as an opportunity for massive growth.
"We’re going to build new factories in China, as well as our factories in India, in Poland and in France as well as the UK. And then we’re going to do some acquisitions as well. So, it’s going to be a very exciting and very busy and challenging few years,” Sanders stressed.
Aviation industry executives know the time-consuming difficulties of moving from small production runs to successful families of passenger aircraft. Therefore, Wang Lizhi, vice president of SLMR, is keen to take on the competition.
“The opportunity is there. It’s not going to stand still waiting for you forever. So, we’ve got to move quickly. The first to run is the winner. That’s the way it is. The rule of the game,” the vice president said.
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