Highly Successful Endeavor

Surion puts Korea on the map of the world aircraft industry as the 12th nation to develop a helicopter

On July 31, a pure Korean-type helicopter, the Korean Utility Helicopter (KUH) was introduced in a ceremony. It is the result of the Korean Helicopter Program (KHP), a project launched in June 2006 to develop and produce a homegrown helicopter to replace the foreign-made ones being used by the military. The project has taken about three years and the new type helicopter will undergo tests and be supplied to the military by March 2010, said Deputy Minister Cho Seok of the Industries Office of the Ministry of Knowledge Economy.
It is not the first time Korea has developed an aircraft. In the case of a helicopter, the 500MD was assembled in 1977 and the nation also produced the UH-60 and BO-105 with imported technologies, followed by the project to improve the LYNX and others to secure helicopters for the Korean military.
In the case of fixed wing aircraft, in 1980 F-5 fighters were assembled followed by the development of the KT-1 trainer aircraft and the T-50 high caliber training aircraft as a Korean model. But the aircraft industry thus far has not been able to develop parts manufacturers, as it has focused on the development of systems. As a result, the value-added portion of the industry is only at 15 percent, far short of the 40 percent average in advanced countries, meaning that it has not been truly satisfactory.
Under such circumstances, the KHP is a great development for Korea's aircraft industry. The Ministry of Knowledge Economy and the National Defense Authority jointly led the project with the participation of 77 domestic companies, 18 universities and 10 research institutes, a total of 105 organizations and firms joining the project, making it a truly pan-national endeavor. They have been taking charge of the development of the 71 parts needed out of 97 for the development of the country's parts industry, setting the project apart from other existing aircraft development projects.
According to the results of research conducted by the National Defense Technology Quality Institute, the KUH project has enabled Korea to boost the technologies related to the development of a helicopter to 79 percent of the international level, a 20 percent improvement over expectations for the KUH project, making it a bridgehead for the independent development of helicopters in Korea.
Not only that, the KUH development project will make it possible to learn design, production and assembly test evaluation. Comprehensive support will be given to the project, enabling Korea to acquire the technologies that went into the entire development process of the helicopter, secure national development infrastructure worth 80 billion won and high-level development manpower and to build a cooperative network with Eurocopter of France, GE of the United States and GKN of Britain, among the world-renowned aircraft makers.
Another contribution from the helicopter project is the construction of a framework for the promotion of the project on a pan-national level.
Traditionally, the value-added portion created by the aircraft industry is 50 times greater than those in the automobile industry. In the case of helicopter production, the parts number over 200,000 pieces, 10 times more than in an automobile, with a high rate for benefits that come along with the technologies. Furthermore, the price per kg. for helicopters is 5.8 million won compared to 10,000 won per kg. for cars.
In 2008, the world aircraft market was estimated at $380 billion, 1.7 times bigger than the semiconductor chip market, and the helicopter market including parts, maintenance, repair and operation amounted to $34.2 billion per year.
With mountains covering 70 percent of Korea's land, military helicopters are frequently needed and the Korean military has the 6th largest helicopter fleet in the world.
According to Eurocopter, in the next 25 years, demand for helicopters around the world will reach 3,250, of which the KUH type helicopter could account for 1,000. Currently, four major aircraft makers including Boeing and Europcopter share 90 percent of the world helicopter market. On top of that, only two or three companies dominate the world helicopter parts market. KAI reported annual sales of only 900 billion won in 2008, roughly 10 to 15 percent of sales of major helicopter makers, and most of Korea's parts makers are in a poor state, which shows that Korea needs strong strategies to enter the world helicopter market.
More than anything else, Korea should take maximum advantage of the results from the KHP. There are plans to draw up the "KUH parts development and business of the technologies" plan to secure a technological edge in order to crack the world helicopter market. At the same time, Korea has been planning to draw up a road map for the development of helicopters for civilian use and the needed technologies based on the results so far from the KHP.
Furthermore, when the results of the technology development from KUH parts are connected with other industries, the expansion of the technologies is expected to boost the growth of other industries.
Korea should focus on exports of Surion and other Korean helicopters through strategic alliances with international aircraft makers. The government at the same time is engaged in promoting taking some stakes in Eurocopter, which controls 30 percent of the world's helicopter market, or to set up a joint venture with the company. The joint venture would be beneficial to the Korean aircraft industry in a number of important ways including the solution to key problems for newcomers in the world aircraft market such as safety and aircraft certificates for their planes. It will enable Korea to use its worldwide marketing network as well as take advantage of Korea's aircraft sales network with the cooperation of international firms.
Behind Korea's rapid economic development were such key industries as steel, shipbuilding, automobiles, semiconductors and IT, among others, pushing Korea's industrialization in record time. Korea now has turned its focus on the aircraft industry as the next growth engine.
Although Korea only shares 0.5 percent of the world aircraft market, the industry is expected to quickly catch up with the leading aircraft makers as the nation's steelmakers, shipbuilders and semiconductor producers did.
"KUH is more than ready to back up the rapid development of the aircraft industry and in the not-too-distant future, we will be able to see Surion helicopters flying the skies around the world, carrying the dreams of Korea's aircraft industry," Dir-Gen. Cho said. nw

Deputy Minister Cho Seok in charge of Industries at the Ministry of Knowledge Economy

A T-50 trainer developed by Korea Aerospace Industries in flight.

Deputy Minister Cho Seok in charge of Industries at the Ministry of Knowledge Economy is being interviewed by President-Publisher Elizabeth M. Oh of NewsWorld.