Topcast: Looking ahead of future MRO market
The company’s chief says there will be a need to expand the support infrastructure for the MRO sector both organically and with new entrants.
September 20, 2021
By PLA Editor
Air & Cargo Services air cargo Air Cargo Asia air cargo freight Air Forwarding air freight Air Freight Asia Air Freight Logistics air freighter air freighting Air Logistics Asia Air Shipping Asia aircraft parts distributors airlines cargo airways cargo asia cargo news cargo aviation MRO service providers Steven Pearson Topcast
Hong Kong-headquartered parts distributor and MRO provider Topcast has been busy as of late expanding its portfolio with new supplier partnerships and building its team of experts to provide better service for its business partners in the mainland. With China’s MRO sector expected to grow in the next 10 years, the company’s chief executive, Steven Pearson, says there will definitely be a need to expand the support infrastructure both organically and with new entrants.
“As the market continues to expand and mature, the ecosystem needed to support it will likely be more and more China based and less reliant on external support networks than it is today,” Pearson mentioned. In an interview, Payload Asia talks to Steven to know more about the company, as well as his prospects for the MRO market as we head into a new normal.
Can you give us an overview of Topcast: product portfolio, coverage and main customers?
TOPCAST has developed and grown strong customer relationships globally for more than 30 years, anchored by our strong presence in China and the broader Asia Pacific region. We strive to provide value to our OEM partners as a key link to our shared customers and an extension of their operations in the regions we support. Our portfolio includes cabin, cargo, engine, electrical & power, flight deck, airframe, consumables & chemicals, and landing gear and braking systems amongst others to deliver a complete solution to the market. We expanded our value offering in 2005 with the establishment of TOPCAST’s MRO business, partnering with top OEM manufacturers as an approved repair provider to offer quality component repair services in the region.
Recently TOPCAST further expanded its presence in China through the acquisition of Shanghai AML Aviation Technologies, to offer more economically justified MRO services to Chinese customers in the country.
How would you describe the Chinese MRO market?
Robust. We see the strong desire for OEM-approved component repairs in the Chinese market. China has led the market in COVID recovery and is forecasted to continue this recovery and move back into a growth phase. With the projected fleet growth and delivery schedule, we see a market that could double in size in the next decade, and targeted plans to build more than 230 new airports while expanding many others in the next 15 years. Coupling this growth with the expanded manufacture of COMAC commercial aircraft will certainly drive expanded MRO demand in China.
Can you cite examples of what’s unique about the industry dynamics in China? How important does experience play in navigating these dynamics?
We have had a presence in China for more than 30 years and have established strong ties with major Chinese airlines and MROs. We have a very extensive and experienced sales team in China and the benefits of being an existing OEM-approved repair provider for many of the suppliers we support. We expect to leverage synergies between AML’s existing operations and our operations at the Hong Kong headquarters to drive best practices and offer increased value to our Chinese customers.
China’s MRO growth is expected to grow from 6.7% to 8.8% from 2021 to 2031. Is the existing capacity in China enough to fill expected demand or will there be a need perhaps for new entrants or consolidation?
As China’s MRO demand grows along with the fleet expansion, there will definitely be a need to expand the support infrastructure both organically as well as with new entrants. As the market continues to expand and mature, the ecosystem needed to support it will likely be more and more China based and less reliant on external support networks than it is today.
Has the company been profitable since it started? What can you tell us about the M&A with AML Aviation Technologies in Shanghai, and how will this help the bottom line?
AML is a successful business and will provide exceptional near-term benefits to the TOPCAST portfolio. Additionally, we see a great opportunity to expand our footprint and consolidate operations across our business units in Shanghai to deliver further efficiencies.