Hyundai, Hanwha ink $5.8 bn defense deals with Poland

South Korea’s defense makers Hyundai Rotem Co. and Hanwha Defense signed formal contracts worth $5.8 billion to export battle tanks and self-propelled howitzers to Poland.

The Defense Acquisition Program Administration said Hyundai and Hanwha on Friday inked their first implementation agreements to ship the K2 Black Panther, a next-generation main battle tank and the K9 self-propelled howitzer, with a Polish military authority at a mechanized unit in the European country.

The DAPA has yet to unveil details such as the value of the deals. But South Korea’s defense industry speculated Hyundai may sell 180 units of the K2 Black Panther in a $3.4 billion contract and Hanwha may supply 212 units of the K9 in a $2.4 billion deal.

Those formal contracts came after South Korean defense makers clinched export deals worth a total of some 20 trillion won ($15 billion) last month with Poland. The country agreed to buy 980 units of the K2 tanks, 648 units of the K9 self-propelled howitzers and 48 units of the FA-50 light combat aircraft.

TO PRODUCE K2 AND K9 IN POLAND

Hyundai and Hanwha plan to sign additional contracts step by step for more supplies. For the second implementation deals under negotiation, the K2 tanks and the K9 self-propelled howitzers are likely to be produced in Poland, according to industry sources in Seoul.

Poland is predicted to sign a formal contract to import the FA-50 aircraft within this year.

“We expect implement contracts for the FA-50 to be smoothly signed by September,” said DAPA Minister Eom Donghwan.

With the Poland contracts, South Korea is set to become the world’s fifth-largest defense exporter. The Asian country’s defense exports topped $7 billion last year after reporting a mere $2 billion to $3 billion annually until 2020.

South Korea has already signed a deal with the United Arab Emirates to sell the mid-range surface-to-air missile (M-SAM) system and a contract with Egypt to supply the K9 self-propelled howitzers.

“The Poland deals are expected to raise total defense exports to some $20 billion this year,” said a South Korean industry source.

Write to Dong-Hyun Kim at 3code@hankyung.com
Jongwoo Cheon edited this article.