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| Korean Air President Ji Chang-hoon, right, poses with Busan Mayor Huh Nam-sik after signing a memorandum of understanding (MOU) at the city council building, Monday. The two agreed to cooperate in developing the company's tech center in the city as a hub of the nation's aerospace business. / Yonhap |
By Kim Bo-eun
Korean Air has unveiled a plan to expand into the aerospace industry by building a 230,000-square-meter industrial cluster in Busan by 2020.
The plan is part of the company's "Aerospace Vision 2020" strategy that was announced on Monday.
The cluster will be added to its existing 710,000-square-meter tech center in the city. It will have factories for aircraft assembly and composite materials as well as research centers, officials said.
"Busan will become the economic hub of Northeast Asia and Korean Air will become Asia's strongest aerospace business by 2020," said Korean Air President Ji Chang-hoon.
Korean Air signed a memorandum of understanding with Busan Monday, particularly for this purpose. The company plans to invest more than 1.5 trillion won ($1.38 billion) into the tech center by 2020.
It aims to increase profits in the aerospace business from the current 600 billion won to 3 trillion won by 2020. Korean Air predicts that this will create 2,300 more jobs by then.
"We will develop the aerospace industry as the representative industry brand of Busan and revive the local economy through increasing production as well as jobs at technology-intensive small- and medium-sized businesses by cooperating with them."
The company is also in the process of acquiring aircraft maker Korea Aerospace Industries (KAI).
Korean Air joined the bidding to buy KAI in August and the final bid is scheduled to start on Nov. 30.
"KAI focuses on the defense industry and the Busan tech center on civilian aircraft. After the acquisition, we plan to manage it as a separate company," said Ji adding, "It will be operated like Hyundai Motor and its affiliate Kia Motors."
The company announced its plans at the city council building in the southern port city, Monday.
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