My Success Partner YG-1, Hanwha Aero Engines (Vietnam, End User)

Vietnam, which recorded its highest economic growth in the last 12 years last year(2022), is attracting great attention, not only from Korea, but also from the entire world including the U.S. and the European Union. With its abundant workforce and geographical advantage, it makes the country an appealing option to global manufacturers which try to diversify their supply chains. Hanwha Aero Engines, YG-1’s end user, also took notice of the growth potential of Vietnam early on. The prime example is Hanwha Aero Engines (HAE), Hanwha Aerospace’s new aircraft engine facility built on a roughly 100,000 square meter space in Hoa Lac Hi-Tech Park near Hanoi. YG-1 Vietnam, which began to work with HAE from its foundation in 2018, has achieved a great success of 7-fold sales growth in 5 years from $300,000 in its first year, to $2.2 million in 2022. The trust and cooperation it provided as the aerospace affiliate’s technical partner in the aircraft engine area was the secret behind the achievement. And the strong relationship of Mr. Byoungik Min, Director of YG-1 Vietnam, who previously worked for Samsung Aerospace for 15 years have contributed greatly to strengthening partnerships in the country. The strategic partnership between Hanwha Aerospace, a leading manufacturer in the state-of-the-art aircraft engine components, and YG-1, a top-ranking company in the cutting tool industry, holds significant meaning. Both companies are expected to develop rapidly and achieve remarkable growth in line with Vietnam’s economic development.

Hanwha Aero Engines in Vietnam, a factory established by Hanwha Aerospace, has served as a stepping stone for the Hanwha Group's subsidiary in the defense industry to enhance its competitiveness and production capability. Leveraging its extensive experience and seasoned skills, the company provides a total service offering that includes design, manufacturing, assembly, maintenance, and strict quality control. This approach is aimed at strengthening its reputation as a professional global leader that specializes in aircraft engines. Hanwha Aerospace, originally established in 1977 as Samsung Precision, has grown into Korea's only aircraft engine manufacturer that covers the entire defense industry, from space and aviation to land, sea, and air. Drawing on its accumulated technologies in the aircraft engine field, the company supplies engine components and modules to the three major global aircraft engine manufacturers, namely Pratt & Whitney, General Electric, and Rolls-Royce, serving as their key partner.

We Grow Together to Go Further
An Interview with CEO & President Hyungwook Nam, CFO & General Manager Yongun Park

Aircraft components known as the hearts of airplanes require the strictest quality control of all manufacturing industries. We believe our accumulated technology over decades has been a key contributor to generating unrivaled performance in the aircraft engine sector through integrating state-of-the-art machinery. Reducing manufacturing costs, improving fuel efficiency, and ensuring on-time delivery are important factors in securing long-term supply contracts with global aircraft engine producers. YG-1 is a reliable partner that collaborates with us to address such issues. Today, YG-1 provides us with cutting tools to process difficult-to-cut materials that are essential for engine manufacturing along with proper and innovative processing solutions. We are satisfied with all of YG-1’s services, from delivery and quality to competitive pricing and rapid problem-solving.

YG-1’s greatest competitive edge is not only price is competitive compared to Western and Japanese suppliers, but also the quality is good. This allows HAE to increase productivity and secure cost competitiveness. YG-1 Vietnam, located just 40 minutes from HAE, always provides quick service whenever we need it. Another competitive edge that differentiates YG-1 from other competitors, creating a virtuous cycle for steadily improving profitability, is the director and related employees regularly visiting to understand our needs and providing continuous monitoring to prevent any issues proactively. Since the component business is also projected to grow vigorously with the Vietnamese government’s plan to attract more foreign capital for high-tech industries, we hope to maintain an even closer cooperative relationship with YG-1.

YG-1 has a wide range of products covering all areas of aviation components and extensive processing expertise with many customer references. Their excellent tools that we primarily use, including the 4G Mill, SUS-CUT, TitaNox Power and Dream Drill INOX, offer the best cost-effectiveness and help increase our competitiveness in both quality and price. Furthermore, YG-1's efforts to minimize lead times for our diverse small-quantity requests have reduced our inventory burden and production costs. Given our need for YG-1's technology and service to increase sales and become a top-tier global aviation component manufacturer, we hope YG-1 will continue partnering with us. One additional request we have is to explore ways of reducing the current 8- to 10-week lead time to 4 to 6 weeks when demand for regrinding increases.