TOKYO -- Kawasaki Heavy Industries is enhancing its capacity to manufacture and supply replacement parts for the jet engines it helped develop for passenger planes.
The Japanese heavy machinery maker plans to invest 18 billion yen ($163 million) through fiscal 2018 at its two domestic production bases in Hyogo Prefecture for jet engines. The company also intends to broaden its network of subcontractors for general-purpose engine parts.
Shipments of jet engines for aircraft like the Airbus A320 family of small passenger jets have now reached cruising speed, so demand for replacement parts will grow in the years ahead.
These replacement parts have higher margins than the originals, and Kawasaki Heavy wants to be in a position to profit from the demand. The company expects sales related to jet engines to reach nearly 150 billion yen in fiscal 2018, up 50% from fiscal 2015.
The company earmarked 15 billion yen for cutting tools and thermal processing equipment to bolster capacity for gear-related parts at its plant in Akashi, and 3 billion yen for machining tools and other equipment at its plant in Kobe. Kawasaki Heavy plans to hire more workers for both factories. By fiscal 2018, the plants will have a combined workforce of 1,710, a 20% increase over the end of fiscal 2015.
Kawasaki Heavy has 85 subcontractors to which it outsources around 50% of its production of general-purpose jet engine parts. By fiscal 2018, it plans to broaden that group to nearly 100 companies and increase the percentage of outsourced production to 75%. The plan is for these outsourced parts to account for 60% of total parts sales in fiscal 2020, up from 50% in fiscal 2015.
(Nikkei)
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