KAI(Korea Aerospace Industries Ltd.) announced that on Nov.7 (Nov. 6, 10:00, Peruvian local time), KOTRA(Korean Trade-Investment Promotion Corporation) signed a final contract for exporting 20 KT-1 planes, amounting to U$200 million to Peru with Peru’s Department of Defense, as part of Peru’s air force trainer replacement project on a Foreign Military Sales basis.
In the contract-concluding ceremony held in Peru, KOTRA’S CEO Oh Young-ho, DAPA(Defense Acquisition Program Administration)’s Commissioner Noh Dae-lae and KAI’s CEO, Kim Hong-gyeong from Korea participated while President Ollanta Humala and Defense Minister Pedro Cateriano attended from Peru.
This deal is a representative example which develops a new export market and provides a new business opportunity to Korea’s companies, said KOTRA CEO Oh Young-ho. We will expand a FMS way to move towards the larger market and larger future and will contribute to increasing Korea’s local defense articles exports.
DAPA made a decisive contribution to successfully conclude the FMS deal by guaranteeing the quality and delivery for the contract of airplanes which KAI will provide. Through the export deal with Peru, KAI secured a bridgehead for exporting the planes to the giant South America’s markets following Southeast Asia and Europe and we expect that Korea’s more defense industry firms will penetrate into the South American markets in the coming years, DAPA Commissioner Noh told.
The deal is very meaningful in that we successfully concluded a contract for exporting homegrown airplanes in the South America where Brazil and Swiss dominantly are prevailing in the trainer market, said KAI CEO Kim, „I sincerely offer my deepest appreciation to the Korean government for making its utmost efforts to us.”
KAI has fiercely competed with Embraer, Brazil until before signing the deal.
In 2005, in the beginning which KAI had attempted to export KT-1 trainers to Peru, the company had expected that since trainers which Peruvian Air Force had been operating were EMB-312s manufactured by Brazil’s Embraer and Brazil had a geographic and political benefit, it would lose to its counterpart, the competitor which dominated the trainer markets of South America.
So, the government and KAI shared the view that in order to expand an export market for homegrown airplanes, it is essential to make inroads into South America’s markets and both players did the private-government-military partnership marketing activity, different from their competitors, and ended up on wining an award, turing the tables.
During the project period, the government had total 5 summit meetings and 3 parliamentary diplomacy activities, having a significant influence on the successive deal for exporting the KT-1 trainers. In addition, provision of surplus articles by the Ministry for National Defense, a MOU for the comprehensive defense and military industry cooperation between both countries, signed by DAPA, and a MOU for joint production cooperation among Peruvian Defense Ministry, DAPA and KAI had a positive impact on Peru’s decision for purchasing Korea’s airplanes.
KOTRA played a role in coordinating the details of the FMS deal which Peru required and cooperating with the Ministry for Foreign Affairs and Commerce and Ministry of Knowledge and Economy and DAPA in an organic way to contribute to wining the award for exporting the KT-1 trainers.
The Korean Embassy to Peru played a huge role by providing strong support at a diplomatic level.
In September, the Defense Agency for Technology and Quality signed a MOU for the government-guaranteed quality with the Peruvian Defense Ministry and raised reliability for the quality of Korea’s homegrown defense articles while supporting for wining an award.
The Korea’s Air Force highlighted great economic feasibility of KT-1s based on its experience for operating those trainers, including lower maintenance expense, 30% cheaper than that of its rival airplanes while appealing to Peruvian’s Air Force that the KT-1s hold the best optimum performances which are suitable for Peru, like anti-terror and rebel force suppression, convincing the country’s Air Force.
Looking to the employment-creating policy which the Peruvian government was driving, KAI offered a variety of industrial cooperation plans, such as a program for joint production with the local company for the KT-1 trainers and an aviation technology education program to move Peru. Coupled with them, KAI emphasized its follow-up support ability which is being proceeded in Indonesia and Turkey to which KAI exported the trainers, making steady progress in raising its reliability with the country.
With this export deal, it is expected that in the South American region where the demand for KT-1-class trainers lone would be more than 200 units in the coming years, KAI could be able to export more trainers to the region and stepping forward, gain momentum in exporting the model to the potential export countries like the Philippines and Columbia.
Park No-seon, Vice President of KAI, who is responsible for this deal told that In the fierce airplane market in the world, the wining of the award for the contract will raise awareness and trustworthiness of KAI to a higher level, which will help facilitate export of Korea’s home-grown planes such as KT-1, T-50 and Surion. I will announce another good news for exporting to other countries in no soon time, he added.
Currently, KAI is making efforts to export the T-50 to Iraq, Chile, the Philippines and the U.S.A. and also does marketing activities targeting the countries for exporting its home-grown Surion copters.
About the basic KT-1 trainer
This trainer is the independent model developed by both The Agency for Defense Development and KAI with their pure domestic technology and boasts the best stability of its kind in terms of great mobility, low-speed performance and a recovery ability in the spin maneuver, an out-of-control status. KAI has delivered approximately 100 KT-1-class planes to the Republic of Korea’s Air Force since 2000. The air force currently operates the planes in 2 ways: one as a basis trainer for pilot’s flying training and the other as a lightweight attack plane equipped with weapons. KAI exported the KT-1 trainers to Indonesia and Turkey.