Kenkoa Aero Signs Defense Contract with KAI

Kenkoreaerospace announced on the 1st that it has signed a 'defense parts production contract' with Korea Aerospace Industries (KAI). Specific supply scale and key contract terms were not disclosed due to confidentiality clauses in the contract.

This contract is a 'K-defense export' project in which KAI and Kenkorea produce global military aircraft and supply them to the US company Boeing Defense. Korea is responsible for the supply chain role, while Kenkorea handles parts production and final assembly.

The company expects that this project will accelerate additional global defense orders in the second half of this year. According to the company, discussions on related orders for military aircraft, helicopters, cargo planes, etc., with global top-tier aerospace and defense companies are in the final stages.

The outlook for defense business performance is also bright. Including this order contract, defense orders have already exceeded 70 billion KRW this year alone, which is about 80% of last year's annual sales (91.1 billion KRW). Kenkorea announced that on the 4th, it signed a 60.5 billion KRW contract to supply military transport aircraft parts with Brazil's Embraer (EMBRAER S.A.). Additionally, it is actively exploring business opportunities with Taiwan's AIDC and China's SACC, and has revealed that it is discussing several new projects with domestic companies such as KAI.

In fact, following Embraer, Kenkorea has continued to secure defense orders including a global Hawk ground equipment MRO contract with the US leading defense company Northrop Grumman Corp, and a contract with Hanwha Systems for upgrading electronic equipment of Korean military aircraft.

Lee Min-gyu, CEO of Kenkorea, said, “Kenkorea's ability to secure business orders stands out in the global market. This is largely due to the excellent customer reputation Kenkorea has built through past projects, and we are preparing for larger projects that are a step up from those secured so far.”

He added, “Not only in defense but also in the civil aviation sector, as aircraft deliveries gradually increase, we expect additional order news this year. We plan to make every effort to achieve external growth and improve profitability based on the stable growth of the defense business.”