Korea eyes $20 bn in weapons exports as Hanwha inks $6 bn Polish deal

South Korea has moved a step closer to achieving a record 28 trillion won ($20 billion) in weapons exports this year, with Hanwha Defense Co. clinching a $6 billion deal to export multiple rocket launchers to Poland.

Hanwha Defense, a unit of chemicals-to-defense conglomerate Hanwha Group, said on Thursday it had signed a basic contract to supply 288 units of its Chunmoo multiple rocket launchers to the European country.

The contract was signed between Hanwha Defense Chief Executive Sohn Jae-il and Polish Defense Minister Mariusz Blaszczak on Wednesday at the defense ministry in Warsaw.

The deal, earlier reported by a Polish media outlet, will mark Korea’s first exports of multiple rocket launchers to Europe.

Hanwha’s Chunmoo comprises a launch vehicle, a multiple-rocket launcher and missiles.

BETTER THAN LOCKHEED MARTIN’S HIMARS

The Korean artillery rocket system boasts performance similar to the M142 High Mobility Artillery Rocket System (HIMARS) developed by US defense firm Lockheed Martin, on top of a lengthy shooting range of up to 300 kilometers.

Hanwha said the first batch of 18 rocket launchers will be delivered to Poland next year after reaching a final deal by the end of this year. It also said it will form a joint venture with Polish defense firm PGZ to build the system in Poland.

The deal follows a string of weapons purchase agreements with Poland for Korean-made battle tanks, self-propelled howitzers and light fighter jets.

Last month, Poland signed a $3 billion contract to buy the FA-50 light fighter jets developed by Korea Aerospace Industries Ltd.

In August, Hyundai Rotem Co. and Hanwha Defense agreed to transport $5.8 billion worth of battle tanks and self-propelled howitzers to the European country.

Poland has been building up its military capacity following Russia's invasion of Ukraine. It shares borders with Ukraine and the Russian enclave of Kaliningrad.

RECORD WEAPONS SALES

Analysts say the latest deal by Hanwha has brightened the outlook for Korea’s weaponry exports to reach a record $20 billion this year.

According to Korea’s Defense Acquisition Program Administration (DAPA), Korea’s annual arms exports hovered around $3 billion between 2010 and 2020. Last year, the value of weapons exports surged to $7 billion on the back of Hanwha’s $1 billion deal to export K-9 howitzers to Australia.

So far this year, Korea’s exports have reached more than $17 billion, driven by LIG Nex1 Co.'s Cheongung surface-to-air missile (M-SAM) deal and Hanwha’s Chunmoo rocket launch exports.

“If the deals with Malaysia and Norway are clinched as expected by year-end, we could see defense exports exceed $20 billion this year,” said Jang Won-jun, a researcher at the Korea Institute for Industrial Economics and Trade.

Write to Kyung-Min Kang and Seo-woo Jang at Kkm1026@hankyung.com
In-Soo Nam edited this article.