Fast 5: Sanad Explores Expansion Into New Sectors
Mansoor Janahi, CEO of Abu Dhabi-based Sanad Group, sat down with Lee Ann Shay and James Pozzi at MRO Middle East in Dubai in late February to speak about the company's plans to build MRO capability while looking to utilize expertise outside of aviation in new industrial sectors.
The past few years have seen organizational changes at Sanad against the backdrop of a challenging industry. What is the current state of business in 2022?
2021 was a very good year for Sanad. Obviously last year saw some recovery from the previous year 2020 as borders opened up and COVID regulations eased somewhat. This has led to a positive improvement in volumes in our engine shops - 2021 saw an increase of around 35% year-on-year. We've built our engine offering over the years and this has led to a well-balanced, diversified engine capability covering mid to mature engines such as the V2500 and Trent 700 along with next-generation models such as the GEnx and the LEAP. We also raised $100 million of financing, which showed trust from large banks in Sanad. We've made an exciting start to 2022 with a new strategy in place. This strategy is underpinned by Mubadala (parent company) to create national local champions and delivering on demand for industrial services. This doesn't mean we will lose focus on aviation - we will focus on new sectors in aviation other than engine MRO that we will expand into. This will be done by capitalizing on our engineering expertise while also utilizing finance, leasing and asset management capabilities. We want to take this into new sectors and grow beyond aerospace.
From the perspective of an engine MRO, are you seeing a quicker pace of recovery in the narrowbody market compared to the widebody segment, or has this been more balanced?
The recovery is happening across the board. Narrowbody engines, from a utilization perspective, have fared better, but with the product portfolio and alliances we have such as being the first independent GE engine shop outside of its network, we've seen this play positively as there were airlines utilizing widebodies for cargo usage. This is similar for the Trent 700 and our role as an independent outside of the Rolls-Royce network. While we didn't see the same recovery in the widebody segment, we've seen shop visits pick up. The strategy we implemented paid dividends last year and saw us do around 100 engine shop visits during that period.
Specifically in traditional engine MRO, where are you looking to grow capability? Could areas such as used serviceable materials and teardowns be explored?
From an aviation perspective, we want to grow outside aviation MRO. In engine MRO, we are looking at USM as that's where you drive value for the end user. We're not doing teardowns, but ultimately if the customer requires us to leverage one and drive further value, then absolutely. If the opportunity is there and the customer demands it, there is capability in place to meet this.
What is the status of the Africa-based Sanad-Ethiopian APU repair joint venture proposed two years ago?
There's still a strategic partnership agreement with Ethiopian Airlines. The agreement was signed in 2020 and step one of the JV was to focus on APU repair services. However due to COVID, this was placed on hold as the volumes were not there to justify an investment. Discussions remain ongoing with Ethiopian to decide when to turn back to this and even discuss the possibility of wider co-operations.
Like many MROs in the Middle East, Sanad has placed a great emphasis on partnerships, particularly with engine OEMs. As you look to further grow, do you foresee more partnerships in the company's future?
Partnerships are one of our core values and will remain so. Today we work with every major engine OEM and this model has proved successful. This will continue to be a core part of our strategy as we move forward.