Story ID: 337
MTU Global Growth Project Underway 
By: Chris Kjelgaard
Caption: In an extensive global expansion program, MTU Aero Engines and MTU Maintenance are expanding their facilities and activities worldwide.
Word Count: 1150
As its business continually grows to new in-house record levels, MTU Aero Engines and its MRO division have embarked on a global expansion strategy that involves construction of new or expanded facilities in six locations. Revenue growth at other MTU facilities continues at high rates, and the group has set itself an ambitious target to expand its worldwide MRO and manufacturing capacity 50 percent by 2027.

In 2018 MTU’s MRO division MTU Maintenance—which has various subsidiaries and joint ventures, the division employing more than 5,000 people—secured approximately $4.4 billion in MRO contract wins, surpassing $4 billion a year in new business for the first time. MTU Maintenance garnered more than 300 MRO contract signatures during the year, of which 46 were with new engine MRO customers. All of MTU Maintenance’s facilities worldwide, including its joint-venture facilities, operated at full capacity in 2018 and the division completed well over 1,000 shop visits and nearly 1,500 other MRO events.

MTU Maintenance won nearly $400 million—a new record—in third-party repair deals during the year, including parts, accessories, and teardown services. In doing so the division served more than 200 third-party repair customers, which placed 20,000 repair orders with MTU. This year, MTU Maintenance—now in its 40th year—expects to maintain its impetus, the division expecting to reach the 20,000-shop-visit milestone in 2019.

“This success, combined with forecast repair demand in coming years, is one of the reasons behind MTU’s plan to build a new European repair facility, in addition to the massive expansion taking place at all the facilities across our network,” said MTU Aero Engines chief program officer Michael Scheyrögg.
Growth in Europe
The new facility to which Scheyrögg refers is a parts-repair facility that MTU intends to build in Serbia, the company having signed a memorandum of understanding (MOU) with the Serbian government on May 7 to set up a new industrial site in the country. The MOU calls for the MTU facility—the location of which remains under negotiation, but it will probably be near Serbia’s capital Belgrade—to form the core of a future aerospace cluster. The new site will be wholly owned by MTU, which expects its new Serbian parts-repair facility—planned to open in 2022—to add about 400,000 repair work-hours a year to the 1.9 million repair-hours total MTU’s other facilities achieve annually.

MTU’s Serbia move follows hard on the heels of the formation by MTU Aero Engines and Lufthansa Technik of the Engine Maintenance Europe (EME) Aero joint venture to build and operate one of the most advanced aerospace-industry maintenance facilities in the world. Launched last May, EME Aero is located in the Polish southeastern province of Jasionka, in Poland’s “Aviation Valley” near Rzeszów-Jasionka Airport. Costing the JV partners about $168 million, the new facility will provide MRO for Pratt & Whitney PW1000G geared-turbofan engines. Opening in 2020, the facility will employ about 800 people and will handle more than PW1000G shop visits annually.

“Year on year, we see flight-hour growth rates of more than 6 percent,” said Scheyrögg. “The geared turbofan engine family will serve this growth. It is one of the most advanced propulsion systems in the market and plays an important role in MTU’s commercial-aircraft business—from an OEM as well as from a maintenance perspective. Alongside our subsidiary MTU Aero Engines Polska in the immediate vicinity, this step is part of MTU’s global ramp-up plan.”

Opening for business a decade ago, the MTU Aero Engines Polska engine-parts manufacturing facility has grown from supporting a few engine types at launch to 48 today. Its workforce has grown accordingly, from 200 employees then to more than 900 now, and the facility forms an essential part of MTU’s ramp-up of new-engine manufacturing and support programs. The facility's first major growth impetus came in 2012 when MTU increased its stake in the IAE V2500 program, now MTU’s largest program. MTU Aero Engines Polska now has significant responsibility for logistics, procurement, design, and quality assurance for the V2500.

MTU (Chalet 69, Hall 2a C254) is planning for the facility to increase production volume of PW1000G components. Additionally, MTU Aero Engines Polska will assemble and produce components for the GEnx-1B engine powering the Boeing 787 and the massive GE9X engine that will power the Boeing 777X. In expanding its engine-program portfolio, MTU Aero Engines Polska supports MTU’s production ramp-up of new engine programs at the company’s Munich location, its largest production facility.

“It is no exaggeration to say that the history of MTU Aero Engines Polska is a German-Polish success story,” said Lars Wagner, MTU’s COO. “The company’s business performance has significantly exceeded our expectations.”

Now MTU Aero Engines Polska is set to expand further. A huge new shop, 430,000 sq ft (40,000 sq m) in area, will host advanced manufacturing processes such as high-speed grinding and additive manufacturing in support of MTU’s manufacturing activities at Munich.

Another MTU Aero Engines-Lufthansa Technik joint venture, Airfoil Services (ASSB) located near Malaysia’s capital Kuala Lumpur, is also due to expand, with a $15 million facility extension due to open by mid-2020. The company repairs low-pressure turbine airfoils for the CF6, V2500, GP7000, and CFM56 engine families and high-pressure compressor airfoils for V2500, CF6, and CFM56 engines. ASSB already repairs about 600,000 compressor and turbine blades annually and its business continues to grow in line with the airline industry’s overall growth. From 2017 to 2018 the ASSB workforce grew from 450 to 533 employees as its repair volume climbed 35 percent. The JV expects its workforce to increase further to 700 in the near future.

A third MTU joint venture, its 80-20-owned MTU Maintenance Lease Services JV with Sumitomo Corporation, is also seeing business grow. The Amsterdam-located business, which focuses on short-term engine lease support and asset management and added a range of technical asset management services to its portfolio in 2018, achieved 37 percent business growth last year.

One MTU wholly owned facility experiencing expansion is MTU Maintenance Berlin-Brandenburg, located in Ludwigsfelde near Berlin. Next month the facility will open a new 70,000-sq-ft, $12.9 million logistics center needed to sustain the location’s continued growth. From 2016 to 2018 MTU Maintenance Berlin-Brandenburg experienced a 30 percent increase in operating hours, and MTU expects the facility’s business growth to continue at a double-digit-percentage rate for the foreseeable future. Last year the facility set up a PW800 mobile repair team, also adding PW800 low-pressure-turbine repair capabilities and parts repairs for PW1100G-JM engines powering Airbus A320neos.

MTU Maintenance Hannover, the MTU Maintenance division’s headquarters site, is expanding too as MTU invests more than $48 million there. A first step is a 237,000-sq-ft expansion of the site’s production area, scheduled to open in September 2020. Next will be a 73,200-sq-ft expansion of the MTU Maintenance headquarters office, planned to open by June 2021.