MALAYSIA is forging ahead with plans to become a regional centre for aerospace manufacturing and maintenance. Two major aerospace manufacturing facilities will be set up in Penang next year, which will mark a major development for the industry. Penang's Chief Minister, Dr Koh Tsu Koon, said this development was as significant as the coming of the electronics components industry to Penang 20 years ago. The aerospace industry is expected to stimulate a number of local companies to participate in a wide range of manufacturing activities, including macro-fabrication, instrumentation, tool-and-die, as well as parts, plastics and composite manufacturing. Malaysia's Prime Minister Datuk Seri Dr Mahathir Mohamad recently revealed plans to manufacture the German-designed amphibious aircraft, Dornier Seastar, in Penang through a joint venture between the German company and several Malaysian partners. Following Dr Mahathir's announcement, a Memorandum of Understanding was signed a few days later for a proposed M$18.5 million (about HK$52 million) joint venture between a local high technology company, Eng Teknologi Holdings, and Canada's MBM Tool and Machine Co to set up an aerospace components and sub-assembly machining company. The facilities will feature state-of-the-art high technology equipment. This will include four and five-axis machining capabilities to cater for complex parts machining and production for the aircraft industry, producing items like wing ribs and flap-track components. The Malaysian Government has also recently entered into a US$250-million 10-year industrial participation programme with McDonnell Douglas Corporation of Canada. The various new aircraft programmes spearheaded by the Malaysian Government, such as the Dornier Seastar and the Eagle, have created a suitable platform for Malaysian high-technology companies to venture into the new aerospace-related industry, especially in the field of precision aircraft components machining. The local aerospace-related industry will be marketed as a vital upstream ancillary and support activity to serve the growing Malaysian and regional market. Eng Teknologi Holdings Berhad (ETHB) has signed a Memorandum of Understanding with an established aerospace-related company, MBM Tool and Machine Co Ltd of Canada, for a proposed joint venture to set up an aerospace components and sub-assembly machining company in Penang. The Eng Group of Companies - a local high technology-oriented corporation - has grown rapidly over the last two decades, focusing on niche industries and high value-added product markets. Pursuing long-term business goals and objectives, ETHB has identified the aerospace-related industry as the next strategic growth area where it can use its core technology and engineering base to further widen its portfolio of activities. Since 1967, MBM Tool and Machine Co Ltd has been a premier precision machining company in the field of aircraft, aerospace and high-technology components and sub-assemblies, serving major aircraft manufacturers such as McDonnell Douglas, Boeing, De Havilland and Hawker Siddeley. MBM will contribute towards the joint venture in terms of business and technology development, technology transfer and quality expertise. Both parties have identified other strategic Malaysian Bumiputra institutional investors and development corporations in the proposed joint venture. Penang is to manufacture the Dornier Seastar, the world's only all-composite amphibious aircraft, by next year. The first aircraft, which is expected to roll out of the Penang factory by the end of 1995, will be ready for delivery by 1996.