HONG Kong Aircraft Engineering Co (Haeco) is switching its engine overhaul business to an $800 million joint-venture company with a subsidiary of Britain's Rolls-Royce Aerospace Group, according to a statement yesterday.
The 50-50 joint venture, known as Hong Kong Aero Engine Services (Haesl), will be situated on four-hectares at the Tseung Kwan O industrial estate and will service large Rolls-Royce RB211 and Trent engines.
Andrew Herdman, managing director of the Cathay Pacific Airways and Swire Pacific-owned Haeco, said the new company had secured a long-term commitment from Cathay and in mid-1996 would begin worldwide marketing for other customers.
Mr Herdman said Haesl was expected to be operational in January 1997 when Haeco's existing overhaul business at Kai Tak would be transferred to the new company.
Haesl was expected to employ about 500 staff - the same number working in Haeco's overhaul business - with all employees given the option to switch to the new company or stay at Haeco.
Mr Herdman said the engine overhaul business accounted for more than 10 per cent of Haeco's turnover and net profit for the year to December 31, 1994. 'We are talking about the future here,' Mr Herdman said.