Korea Aerospace Industries, Ltd. (KAI) is going all-out to grow up to become a total solution provider of the global aerospace industry in the near future, a top executive of the company said.
"Through a balanced development of civilian and munitions industries, KAI will exert best efforts to achieve 4.3 trillion won in sales and 60 percent in the ratio of exports by 2020," said Kim Hong-kyung, president and CEO of KAI.
Korea's aerospace industry has been growing up rapidly through the business strategy focusing on development and production of various aircrafts, especially for national projects.
"Based on this, we will make doubled efforts to grow up into a top-tier global company exporting such aircraft as T-50 Golden eagle jets, advanced trainer airplane, and KT-1 basic trainer planes," the KAI top executive said.
In an interview with Korea IT Times, CEO Kim said, "In keeping with the global specialization trend of aircraft development, we plan to further cement strategic tie-ups with world-famous aircraft manufacturing companies, including Boeing and Airbus and actively participate in international joint development projects for state-of-the-art large civil aircraft."
He also stressed, "In addition, we will make a strong push for MRO (maintenance, repair and operations) projects to foster them as a new growth engine by strengthening our service ability, including parts supply, not to mention fostering our ability to develop aircraft."
Exports of T-50 Golden eagle jets to Indonesia
Asked about the significance of the KAI exports of T-50 Golden eagle jets to Indonesia, Kim said, "The company's exports of the T-50 advanced trainer airplane means its first advancement into the global trainer plane market. By doing so, Korea has become the sixth country to export supersonic aircraft in the world, following the U.S. Russian, Britain, France and Sweden."
Noting that the aerospace industry, a complex of advanced industrial technologies, is a high value added industry leading the nation's industrial technology, Kim said, "The exports of T-50 has upgraded the national status of Korea in the global stage by heralding Korea's up-to-date aircraft technology to the world."
On the ripple effects of the T-50 exports to Indonesia on the domestic economy, the CEO said, "From the viewpoint of the aerospace industry, it indicates that the domestic aircraft industry can expand its pie in the global aircraft market, tiding over the limited domestic market.
"By becoming the world's sixth nation to export supersonic aircraft, we received global recognition on Korea's aircraft comprehensive technology power ranging from self design, production to test appraisal," he explained.
Commenting that in the aerospace industry, widely different from other export industries including automobiles and plant, the launch customer in general dominates the market, he said, "Accordingly, we can preoccupy the advanced trainer airplane and light attack plane markets and expect ripple effects in countries considering imports of such planes."
Considering the economic ripple effects of the export of a single T-1 equivalent to shipments of 1,000 mid-size cars, it can generate some $650 million in production inducement effect, $170 million in value added and creation of 7,700 jobs.
"In addition, about 70 small and medium-sized subcontractors take charge of producing 38 percent of the total of $400 million exports, contributing to jacking up the factory operation ratio of the overall domestic aerospace industry," the spokesman said.
The following are the main contents of the interview with Kim Hong-kyung, president and CEO of KAI.
Q: Would you comment on the prospects for KAI's exports of T-50 supersonic trainer airplane
A: Out exports of T-50 to Indonesia is expected to give a positive effect for KAI to export supersonic trainer sets to other countries. The global demand for T-50 class advanced trainer airplanes is expected to reach some 3,300 units by 2030. We aim to export more than 1,000 planes or 30 percent of the total global demand.
Poland is likely to issue a request for proposal (RFP) for attack planes armed with weapons in the immediate future and Israel plans to introduce advanced trainer jets for the pure purpose of training.
Q: KAI was listed on the KOSPI market on June 30. Do you have any special reason on the initial public offering (IPO)
A: KAI, established in 1999, has been making a new leap forward continuously. With the exports of T-50 to Indonesia, we have prepared a decisive turning point to advance into the global aircraft market in earnest.
In addition, we aim to become a leader in the global aerospace industry by jacking up our company's export portion to 60 percent by 2020. Through IPO, we plan to secure enough funds to expand facility investment, which is inevitable to grow up into a top-tier aerospace company.
Q: Would you make comments on merits of IPO as a national defense-related company
A: KAI is the nation's sole comprehensive aircraft maker taking responsibility ranging from development of aircraft, manufacture, test flight and after sales service, occupying an important position in the national aerospace industry.
I expect the IPO through direct investment of general investors will bring about positive synergy effects in the course of being developed into a top-class global aerospace company.
Q: Boeing has recognized KAI as a top supplier of core parts of B787-9 for superior performance and ability. Would you make comments on this
A: Last February, KAI concluded a contract with Boeing to supply core parts of B787-9 as a Tier 1 subcontractor. Under the contract, KAI will supply wing rib of B787-9, the next generation passenger plane with 250-290 seats, to Boeing from 2012.
Thanks to the contract, KAI has been entitled to participate in the joint development projects of advanced aircraft being pushed by Boeing in the future as a business partner.
Troy Kim, a Boeing director in charge of Asia, said, "KAI is a business partner which can satisfy quality and price conditions demanded by Boeing. The persistent favorable partnership between Boeing and KAI will become a driving force for the Korean company to observe the business schedule and supply core parts at a proper time."
