France's Snecma aims for 10% annual growth in China until 2015

BEIJING (XFNews) - French industrial giant Safran expects its aerospace subsidiary Snecma to achieve China sales growth of about 10 pct each year until at least 2015, Patrick Borel, Safran's Asia director, said.

"We hope to grow in parallel with the development of the Chinese aviation market," he told XFN-Asia in Beijing.

"We sell 1000 CFM56 engines per year globally, with 10 pct of sales to China. The figure should grow 10 pct a year," he said.

The CFM56 engine -- Snecma's chief product in China -- was jointly developed with General Electric. Snecma is the sole engine supplier for the Boeing 737. It also supplies the Airbus A320 and A319 aircraft.

Currently Snecma has a 55% market share in China for its CFM56 engine and Borel said he hoped to maintain this share.

"We aim to have a bigger market share than the V2500," he said, referring the CFM56's main competitor, the V2500 engine, built by Rolls Royce and Pratt & Whitney.

Snecma supplies all of China's main carriers with Shenzhen Airlines as its latest customer. It landed an engine order valued at 60 mln usd last month.

Safran group also supplies other aircraft parts to China aircraft such as carbon brakes, cables and landing gear.

Borel said biggest challenges for Snecma in China included the surging prices of oil and port manufacturer approved (PMA) parts.

"The current prices of oil can limit our growth in China," he said.

He said PMA's, which are copied aircraft parts approved by China's authorities, were also hurting growth.

"Every PMA sold is that much less for us," he said.

He added repairs of engines by non-qualified companies were also difficult to control.

Snecma has one maintenance company in China called SSMAC set up as a joint venture with Air China and Willis Lease Finance.

The control and maintenance of each engine is valued at one mln usd every five years.

On Sagem's presence in China he said the 2008 Olympic Games offered good opportunities for growth especially in hi-tech security.

Safran's first half sales rose 2.3%t to EUR4.943 billion.

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