South Korea’s aerospace manufacturing capabilities have been boosted by a major new contract between Rolls-Royce and Hanwha.
The British OEM had previously used Hanwha as a supplier for engine casings but is now deepening their relationship by also opting from more complex turbine parts and core components.
“Combustion rear inlet cases, aircraft engine intercases and the A-Frame produced and manufactured by Korea’s Hanwha Aerospace are all key parts used in the engine assembly,” said Warrick Matthews, Rolls-Royce executive vice-president of procurement and installations supply chain.
The initial, $1 billion contract will cover 10 engine parts across the Trent series of engines. Hanwha will manufacture the parts in Vietnam before shipping them to Derby for final assembly.
The South Korean company Vietnamese factory began operations in 2018 and the company plans to open a second site, for which construction began in October, in 2020.
As well as boosting Hanwha’s aerospace activities, in which the South Korean company is injecting $3.4 billion over the next three years, the deal is good news for Vietnam’s rapidly growing aviation sector.
Vietnam’s ministry of transport plans to invest about $15 billion in its aviation sector until 2030 and the country’s aviation regulator is encouraging local companies to explore joint ventures and add to the country’s MRO capacity, which at present is largely limited to Vietnam Airlines Engineering (VAECO).
Vietnam Airlines was valued at $2.5 billion in its initial public offering in May, while already-listed Vietjet has a market capitalisation of roughly $2.8 billion.
With such powerful players, plus the ongoing success of joint venture Jetstar Pacific, it seems likely that Vietnam will host more aftermarket development.