South Korean and Indonesian firms inked a strategic cooperation agreement that seeks to deepen defense collaboration between them, media outlets reported December 4.
The deal between Korea Aerospace Industries (KAI) and Indonesia’s state-owned company PT Dirgantara Indonesia (PTDI) would establish closer ties necessary to strengthen ongoing collaboration as well as explore new areas.
“The agreement will pave the way for continued bilateral cooperation between the two companies and help them work together,” a KAI official told The Korea Times.Enjoying this article? Click here to subscribe for full access. Just $5 a month.
The deal, signed December 4, calls for expanding cooperation, including in the sectors of unmanned aircraft as well as the defense and commercial aviation industries. The two sides will also form a committee to discuss ways to promote greater collaboration and will hold biannual meetings.
KAI officials also reportedly said that the new agreement would allow it to make greater inroads into the Indonesian market, including in areas like the depot maintenance market for the air force and other aerospace sectors.
The new pact will also facilitate work by the two companies on the new Korean Fighter Experimental (KFX) 4.5-generation aircraft. KAI and the Indonesian government had concluded an agreement on November 23 outlining the specifics of their ongoing cooperation on the joint development and production of the KFX.
Under the agreement, Indonesia would contribute 1.7 trillion won ($1.5 billion) of the total 8.7 trillion won in development costs, and PTDI would participate in the design and production phase as well as acquire access to aviation technology and know-how. Indonesia would be entitled to purchase the aircraft.
“The strategic partnership of the two countries will guarantee the success of KF-X and entry into a new market,” KAI President Ha Sung-yong said, according to South Korean media outlet Yonhap News. “It will be a win-win deal for the two countries’ aerospace industries to become a new growth engine for the countries’ economic growth.”
The KFX collaboration between Jakarta and Seoul dates back to 2009, when the two countries first signed a letter of intent to develop the jet. South Korea has been looking to develop the aircraft to replace its aging F-4 and F-5 fighter aircraft as well as to export to several countries. KAI was selected as the preferred developer of the KFX in March.