Hanwha Aerospace closes in on Romania’s howitzer deal

Hanwha Aerospace Co., South Korea’s major aerospace and defense system developer, is highly expected to bag a $920 million contract to supply its K9 howitzers to Romania after emerging as the sole preferred bidder.

Korea’s Ministry of National Defense announced on Wednesday that Hanwha Aerospace was named the only preferred bidder for the deal, which is expected to deliver 54 units of its K9 howitzers and 36 units of its K10 ammunition resupply vehicles (ARVs) to the country in Eastern Europe, after beating Germany's PzH5000 and Turkey’s BMC T-155 artillery weapon systems.

Cheering the news, Hanwha Aerospace shares jumped 8% to end at 251,000 won on Wednesday.

The news comes after Hanwha Aerospace during an earnings conference call in late February said it would disclose the result of its bid for Romania’s howitzer project in the first quarter.

Two months later, Korea’s defense minister visited Romania to discuss Hanwha Aerospace's offers with his counterpart in the Eastern European country.

Its victory comes amid the growing presence of Hanwha’s K9 in the global howitzer market.

HANWHA K9’S GROWING PRESENCE IN THE WORLD

According to the Stockholm International Peace Research Institute (SIPRI), Hanwha Aerospace’s K9 commanded a 52% share in the global howitzer market last year.

If the company signs a binding contract with Romania, it would mark its first weapons exports to the country, which would be the 10th importer of K9 howitzers in the world. This suggests that Hanwha’s howitzers are set to become a global standard.

The deal was also the biggest weapons order for the Eastern European country in seven years.

Romania has been carrying out a project to modernize its military weapons systems since last year.

This is the first howitzer acquisition for the country, a member of the North Atlantic Treaty Organization (NATO), reflecting growing concerns about geopolitical risks since Russia’s attacks on Ukraine.

Of the 10 countries deploying K9 howitzers, Eastern European countries such as Poland, Estonia and Turkey, or Turkiye, have been active in acquiring the Korean weapon system.

As the adoption of K9 howitzers increases, six K9-using countries, including Korea, Poland, Estonia, Finland, Norway and Australia, held a so-called "K9 user club" meeting in January, in which Hanwha announced a plan to set up a K9 howitzer parts supply center in Poland.

The news from Romania heightened expectations of future orders for Hanwha’s K9 howitzers and other weapons amid growing geopolitical risks in the world.

In July 2022, Hanwha Aerospace inked a deal with the Polish government to export 672 units of the K9 howitzers and 288 units of Chunmoo multiple-launch rocket systems.

In December last year, it also won a $2.6 billion deal to export additional K9 self-propelled howitzers to the Eastern European country.

Its other notable major overseas deal is a $2.4 billion armored vehicle supply contract to Australia announced in December last year.

Write to Hyeon-woo Oh at ohw@hankyung.com

Sookyung Seo edited this article.