November 29, 2024

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K9 battle tank by Hanwha Defense (Hanwha Defense)

The South Korean defense industry sold over 21 trillion won ($14.7 billion) worth of defense systems and weapons to Poland this year, double that of Seoul's total defense exports in last year alone.

The value of the deals clinched by top defense companies Hanwha Defense, Korea Aerospace Industries (KAI) and Hyundai Rotem this year was two times more than the $7.2 billion in weapons South Korea exported globally in 2021, according to market data and news reports.

The order list includes 48 units of supersonic advanced jet trainers and light combat aircraft FA-50 (KAI), 980 units of battle tank K2 (Hyundai Rotem) and 648 units of self- propelled howitzer K9 and 288 units of rocket artillery system K239 (Hanwha Defense).

Poland is currently replacing the Soviet-era tanks and other defense weapons that Poland has donated to Ukraine, with which it shares a border, to use in its fight against Russia.

Experts said the European country’s preference for “Made in Korea” weapons is because of Korea’s continuous investment in R&D and its production capacity as the country is technically still at war.

“There are not many companies around the world that can make massive number of weapons within a designated timeframe. South Korea is one of very few (firms) with stable production capacity coming from its readiness of preparing the war for the past 70 years, not to mention the cost competitiveness,” said Yang Wook, an assistant researcher at Asan Institute for Policy Studies.

Although the COVID-19 pandemic has upended the global economy, South Korea's defense industry was able to secure stable supply through localizing about 78 percent of the parts needed for defense products, industry data showed.

“For example, German battle tank Leopard 2 costs about 16 billion to 20 billion won per unit and takes more than five years to produce 50 units, but the Korean tank K2 is priced at 8 billion to 10 billion won and can deliver 180 units in three years,” said a Hyundai Rotem official.

Hyundai Rotem has released and delivered 10 K2 tanks to Poland last week, just three months after it clinched the contract with the European country for a total of 180 units. The rest will be delivered to Poland in batches by 2025.

Last year, South Korea was the ninth-largest arms exporter in the world. With South Korean President Yoon Suk-yeol declaring recently that he would make the country one of the world’s “top four weapons supplier,” the market is expected to grow even more rapidly.

Firms are also looking to do more than just land big deals with the European country.

State-run KAI is seeking to develop the business-client relationship with Poland to more of a partnership that can jointly develop Europe’s defense technology.

“By discussing with Poland, we will soon set up an MRO center for repair and maintenance of FA-50, as well as running a flight training program there to nurture talents in Poland,” said a KAI official.

Technology transfer is also being discussed on the level of production, maintenance and repair technology, excluding the firm’s core technology know-how, the official added.

Hyundai Rotem is also planning to construct a K2 tank and K9 howitzer production factory in Poland for local production starting from 2026, where active technology transfer is expected, according to the company.

By Kim Da-sol (ddd@heraldcorp.com)