Boeing to Boost Manufacturing in Vietnam as Supplier Builds Plant

VIETNAM - HANOI, Jan 24 (Reuters) - South Korean aero parts supplier KP Aero Industries said on Wednesday it plans to invest $20 million in a Vietnam factory to assemble components for Boeing BA.N planes, a move that would expand the U.S. aviation firm's manufacturing network in the Southeast Asian country.

The U.S. aviation giant already has seven "sub-tier" suppliers - companies that sell components to its direct suppliers - in Vietnam.

In September, Boeing also reached a preliminary deal with flag carrier Vietnam Airlines for the sale of 50 Boeing 737 Max 8 jets.

Read Also: Malaysia Central Bank Holds Rates Again, Flags Inflation Risks

Lee Young-su, a senior official at KP Aero, told Reuters the company would initially invest $20 million through 2028 to assemble components for Boeing 787 and 737 aircraft.

KP Aero will be formally granted later this week the authorisation to invest $20 million in Vietnam, authorities in the central city of Danang said in a media statement on Wednesday.

A Vietnamese official said the investment will be in the city's high-tech industrial park.

KP Aero is a supplier of parts to Korean Air's engineering division, which is in turn a direct supplier to Boeing.

Boeing deferred to KP Aero for comment.

(Reporting by Francesco Guarascio and Ju-min Park; editing by Miral Fahmy)