This approach enables aerospace small and medium enterprises (SMEs) to invest in automation, certification, and process excellence — the three pillars of productivity in aerospace manufacturing. "Once MTDC came in with equity participation, companies became bankable.
This allowed banks to finance the remaining 80 per cent," Naguib explained. "But more importantly, it allowed firms to reinvest in productivityenhancing technologies, training, and research and development."
ADDRESSING PRODUCTIVITY BARRIERS
Despite strong growth — with aerospace exports now reaching RM25.1 billion, surpassing pre-pandemic projections — the industry's labour productivity remains below the national average.
As of August 2025, the industry labour productivity stands at RM62,350 per worker, compared to the national average of RM99,265 per worker, highlighting persistent productivity gaps that need to be addressed to sustain long-term competitiveness.
Malaysia's labour productivity in aerospace trails behind leading countries such as Japan and Canada, largely due to:
1. Limited access to tailored financing for strategic sectors
2. High capital intensity and certification costs, which slow automation
3. Shortage of highly skilled local talent with engineering and systems integration capabilities.
"Aerospace is one of the most capital- and skills-intensive industries in the world," Naguib said. "Without productivity-enhancing tools — from digital design to lean manufacturing — SMEs cannot compete globally, no matter how capable their engineers are."
To tackle this, MPC's Productivity Model Company (PMC) framework is being applied to aerospace firms, integrating ecosystem development, process optimisation and manpower upskilling into a single productivity roadmap.
FROM VISION TO PRODUCTIVITY OUTCOMES
The first aerospace company has already secured RM60 million under the scheme — a landmark achievement demonstrating the viability of the model.
Naguib said this success "sets the productivity benchmark" for other high-value industries. "It's not just about accessing capital; it's about using that capital to improve output per worker, per machine, and per ringgit invested. Productivity is the only path to competitiveness," he said.
MPC plays a crucial role in tracking productivity milestones, ensuring that each financing recipient demonstrates measurable performance improvements in output efficiency, lead time reduction, and digital integration.
BUILDING A HIGH-PRODUCTIVITY WORKFORCE
The next major productivity frontier, Naguib noted, is human capital. Despite offering well-paying, highskill jobs, Malaysia's manufacturing sector still struggles to attract young talent.
AeroPN is now collaborating with TVET institutions, universities, and industry players to create clear career progression pathways — from shop floor technician to aerospace systems engineer.
"In Germany and Japan, it's normal for a production worker to rise to senior management," said Naguib. "That mindset must take root here if we want to sustain productivity growth."
GLOBAL BENCHMARKING AND NEXT STEPS
With MAIA and the National Aerospace Industry Corporation Malaysia steering the industry's coordination, Malaysia's aerospace ecosystem is now considered one of the most integrated in the region.
The goal ahead, Naguib stressed, is to move from component manufacturing to system-level productivity — mastering high-value areas such as urban air mobility, avionics, and space systems.
"We've proven that we can compete at Tier 1 level, as shown by CTRM's acquisition of Spirit Aerosystems Malaysia," he said. "The next phase is to deepen our productivity advantage — producing more value with fewer resources and faster innovation cycles."
A PRODUCTIVITY-DRIVEN INDUSTRIAL FUTURE
The aerospace sector's transformation encapsulates Malaysia's broader shift from grant-dependent industrial growth to productivity-led competitiveness.
"We're no longer in an economy that can rely on subsidies or oil revenues," said Naguib. "We must now build productivity capacity from the ground up — developing companies that can innovate, export, and sustain growth without depending on handouts."
With the right financing structures, ecosystem alignment, and talent development, Malaysia's aerospace industry is poised not only to meet its 2030 targets but to become a global productivity benchmark in advanced manufacturing.