Hanwha inks $1.7 bn K9 howitzer deal to Egypt

Hanwha Defense Co. signed a contract to sell K9 self-propelled howitzers to Egypt on Tuesday in a deal worth over 2 trillion won ($1.7 billion.)

Of the company's eight sales agreements for K9 self-propelled howitzers, this is largest contract amount so far. The deal also marks the artillery system’s first export to Africa and the Middle East. 

The Defense Acquisition Program Administration (DAPA), South Korea's arms procurement agency, announced the agreement.  

Tuesday’s deal follows the nation's largest-ever arms export deal to date inked earlier this year. The United Arab Emirates agreed to import mid-range surface-to-air missiles dubbed Cheongung II from South Korea, on Jan. 16, valued at $3.5 billion. 

A DECADE IN THE MAKING 

The deal signed between the South Korean manufacturer and Egypt's defense ministry in the Artillery House, a military facility in Cairo, was the result of more than 10 years of on-again, off-again negotiations. 

During President Moon Jae-in’s visit to Egypt late last month the negotiations were almost halted; but were salvaged in a dramatic turnaround over just 10 days. A DAPA official familiar with the talks told The Korea Economic Daily that Cairo has accepted Korea’s final suggestion without request for further adjustments. 

The deal encompasses the production of K9s in Egypt and a technology transfer, according to DAPA.

The negotiations for the long-awaited deal were interrupted due to an ongoing wave of pro-democracy Arab Spring protests in the region, which began in 2011.

The K9 howitzer was designed and developed in 1998 by the Agency for Defense Development (ADD) and Hanwha Defense., then named Samsung Techwin Co. 

Equipped with a 360-degree rotating turret, the 47-ton weapon has a firing range of 40 kilometers and moves as fast as 67 km/h.  

Thanks to an automatic fire control system, K9 can fire within 30 seconds from a stationary position and within 60 seconds while on the move.

The tracked artillery system meets NATO standards and as a Hanwha Defense official explains, it can be deployed in a broad range of environments, including snowy terrain and deserts at home and abroad.

DEFENSE EXPORT TO SURPASS $10 BN 

The defense export to Egypt was especially noteworthy for beating Germany’s 155 mm self-propelled howitzer known as the Panzerhaubitze 2000 (PzH 2000) and the US counterpart M109A6 Paladin.

Based on a report by the Stockholm International Peace Research Institute, the K9 Thunder accounted for 48% of the global self-propelled howitzer market between 2000 and 2017. 

Just last month, Hanwha Defense inked a $788 million deal to supply K9 self-propelled howitzers to Australia, marking its first sale of the self-propelled artillery system to a member country of an intelligence alliance with the United States.

Hanwha signed the contract with Australia’s Capability Acquisition and Sustainment Group to sell 30 units of the self-propelled howitzers, which will be branded as the AS9 Huntsman in the country, and 15 AS10 armored resupply vehicles.

Back in 2020, Hanwha Defense was named the preferred supplier of howitzers and associated support equipment to Australia.

The Australian government announced in September 2020 that it has chosen the K9 self-propelled howitzer, nicknamed Thunder, as the solo candidate for the country’s Land 8116 Artillery Replacement project, one of the Australian Army's modernization programs.

South Korea’s defense exports hit a record high last year as key local makers such as LIG Nex1 Co., Hanwha and Korea Aerospace Industries Ltd. (KAI) scored major export agreements. 

The country exported about $7 billion worth of military equipment in 2021, far exceeding the earlier $5 billion forecast.

The overseas sales are expected to top $10 billion this year with hopes for more major supply contracts with the Middle East, Europe and Australia.

A defense industry insider said Korea’s defense makers boast strong customer service even after the sale and are highly regarded in its technology transfer. The person also said they are often cost effective compared to those made by other countries.

In a written briefing Tuesday, President Moon touted the deal as “yet another occasion to prove South Korean defense system’s superiority." 

LIG Nex1 is in negotiations with different countries for the export of its Cheongung II, following its recent deal with the UAE. 

Hanwha Defense is competing with a German enterprise to export its AS-21 Redback to Australia. The winner of the 27 billion Australian dollar deal will be decided within the first half of this year. 

Meanwhile, aircraft maker Korea Aerospace Industries (KAI) has launched an aggressive marketing campaign of its light combat aircraft FA-50 to Latin America, particularly Colombia. 

Hyundai Rotem is also working towards securing orders of the K2 Black Panther, a next-generation main battle tank designed by the South Korean Agency for Defense Development, from Norway.

Write to Kyung-Min Kang, Young Chan Song at kkm1026@hankyung.com
Jee Abbey Lee edited this article.