Pacific Aerospace signs $112m plane building contract

1.00pm

Hamilton company Pacific Aerospace said today it had signed a joint venture deal to build aircraft worth $112 million in the next three years.

The deal with Canadian-based company Megachrome, of Montreal, will enable Pacific Aerospace to increase production of its recently launched PAC 750XL plane.

The versatile $1.56 million aircraft can be used as nine-seat passenger plane, as a freight servicing aircraft or in the adventure market.

The deal follows an announcement earlier this week that Alpha Aviation, also Hamilton-based, planned to manufacture and market worldwide a French-designed two-seater plane from a new factory at Hamilton Airport.

Alpha Aviation expects to make more than 100 aircraft, worth more than $15 million, every year, creating 50 skilled jobs.

Pacific Aerospace, which already builds two other models in Hamilton -- the Cresco and CT4/E Airtrainer -- says it will hire another 60 staff.

Since November last year, it has expanded its workforce from 80 to 160.

By the end of 2008, Pacific Aerospace and Megachrome aim to have build 72 aircraft. The partners have orders for 92 planes.

Pacific Aerospace has already supplied new 750XLs to Australia, Switzerland and the United Kingdom. Two more orders, from the US, are being filled.

The announcements comes in the wake of plans for a $51 million redevelopment at Hamilton Airport.

Pacific Aerospace bosses said the agreement easily made Waikato the manufacturing hub of New Zealand's aviation industry and was a 'huge" step forward in the company's growth strategy. Employees were briefed on-site yesterday.

Mr Hare said the deal was the perfect way to break into the North American market.

"These are fresh fields. They (Megachrome) came to us and presented us with an agreement which matched up with where we wanted to be."

Sales and distribution in the massive North American market, the world's biggest, would be made easier with Megachrome on board.

Megachrome had an annual turnover of about $500 million and a workforce of 1700, Mr Hare said.

It specialised in high-precision engineering and supplied automotive equipment to Formula One racing cars, as well as building large engines for Mercedes and BMW vehicles.

Mr Hare said there was no threat of Pacific Aerospace moving its operations offshore but some employees would be exchanged between New Zealand and Canada.

Hamilton would produce 'the bits and pieces and box them up and send them over there", Mr Hare said.

Landing gear, engines, brakes and other engineering components would be manufactured in Canada.

- NZPA