As a world leader in vacuum oil quenching of large aerospace components, VAC AERO is preparing for increases in commercial aircraft production that are forecast over the next few years.

Despite the fact that production for portions of these programs continues to move offshore, VAC AERO expects to be installing additional vacuum oil quench capacity to support forecast increases in demand in North America. Indeed, some of the new large aircraft programs will require some of the biggest vacuum oil quench furnaces ever constructed by VAC AERO.

Poland

To offset some of the reduction in manufacturing activities in North America, VAC AERO continues to expand its international operations. For the last several years in Poland, VAC AERO has been offering vacuum heat treating and brazing, thermal spray and inorganic paint services to the increasing number of turbine engine component manufacturers that are establishing themselves in that country. The Polish operations will continue to expand in 2008 with the installation of additional processing equipment and plant space.

Montreal Coatings Division

VAC AERO is also investing in research into new coating techniques, such as cold spray, through its main coatings facility near Montreal, Quebec.

India

VAC AERO’s joint venture with HIGHTEMP Furnaces of India has completed its first vacuum gas quench furnace. The furnace is being installed in the new HIGHTEMP VAC AERO facility near Bangalore. The joint venture offers both heat treating services and vacuum furnace manufacturing to customers in India. Aerospace manufacturing continues to grow in India and is expected to be a big market for HIGHTEMP VAC AERO when all relevant approvals are in place. The business is expected to grow substantially in the next few years and new equipment and capabilities will be added to keep up with demand.

In summary, VAC AERO is positioning itself to service a global market for both special processing services and furnace equipment. Despite competitive pressures from abroad and economic uncertainties in North America, VAC AERO is excited about its opportunities.