[Exclusive] 'Minimizing KF-21 Price Burden'.. From 900 billion won per unit to early 1 trillion won

[Financial News] The actual delivery contract amount for the additional 20 units of the KF-21 Korean fighter Boramae has been adjusted upward by about 5% to a total of 100 billion won compared to the first 20 units contract. In the additional production that took place in just one year, the actual delivery contract amount per unit increased by about 50 billion won.
Over the past year, concerns that the actual delivery contract amount per unit would increase by up to 400 billion won due to high exchange rates and raw material price increases have been dispelled, and it is evaluated that the KF-21 price burden has been minimized.
On the 14th, Financial News obtained the actual delivery contract price per unit for the additional 20 production units of the KF-21 Boramae this year. The aircraft body is in the mid-700 billion won range, the engine is in the mid-200 billion won range, and the radar is in the 50 billion won range. In the case of the first 20 production units contract for the KF-21 last year, the aircraft body was in the early 700 billion won range, the engine was 230 billion won, and the radar was 46 billion won.
The combined scale of the aircraft body, engine, and AESA radar resulted in an increase of about 50 billion won per unit for the aircraft unit price, while the increase in the contract amount per unit for the engine and radar was only in the range of several billion to 10 billion won. When combining the aircraft body, engine, and radar, the actual delivery contract amount per unit for the first KF-21 was adjusted upward from the late 900 billion won range to the early 1 trillion won range, with an increase of about 50 billion won per unit.
While the pure delivery contract amount per unit, not the simply disclosed contract amount by the government and each defense company, has been identified, the actual adjustment range is analyzed to be not as large as expected. As a result, the actual delivery contract scale for the first 20 production units of the KF-21 is in the range of 1.96 trillion won, and the contract scale for the additional 20 production units is around 2.05 trillion won, an increase of about 100 billion won.
Looking at the related amounts disclosed by Korea Aerospace Industries (KAI), which supplies the aircraft body, Hanwha Aerospace, which is responsible for the engine, and Hanwha Systems, which supplies the AESA radar, the adjustment increase rate is 23%, from 2.22 trillion won to 2.73 trillion won. However, when examining the actual contracts between the Defense Acquisition Program Administration and each defense company, the actual contract amount adjustment increase rate for the KF-21 body was found to be only 5%.
This contract amount was coordinated by the cost team of the Defense Acquisition Program Administration, and although there is a possibility of adjustment through actual delivery in the future, the fluctuation range is known to be not large.
The initial mass production volume of the KF-21 was originally 40 units, but due to the results of a feasibility study by the Korea Institute for Defense Analyses (KIDA), which indicated a low level of technical completeness such as air-to-air missile armament performance verification, the first 20 units were contracted last year, and the remaining 20 units were additionally contracted this year. In this process, there were predictions that the KF-21 price burden would increase significantly due to exchange rate increases and supply chain issues, but it is analyzed that the adjustment range has been significantly reduced.
A government official explained, "The announced contract amount includes various factors such as the logistics support system," adding, "There are many speculations that the delivery contract amount per unit will increase by hundreds of billions of won, but the actual fluctuation range is not large." 
hoya0222@fnnews.com Kim Dong-ho Kim Hak-jae Reporter