Global Courant 2023-05-29 06:40:00
SEOUL – South Korea is using a US$13.7 billion (S$18.5 billion) arms deal with Poland – Seoul’s largest ever – to lay the foundations for a military-industrial juggernaut that the two nations’ defense companies hope will it will fuel Europe’s hunger for weapons far into the future.
South Korea’s arms sales have soared from $7.25 billion in 2022 to more than $17 billion in 2022, according to the Defense Ministry, as Western nations scrambled to arm Ukraine and tensions rose in other hot spots like North Korea and the South China Sea. .
Last year’s arms deal with Poland, a key NATO member, included hundreds of Chunmoo missile launchers, K2 tanks, K9 self-propelled howitzers and FA-50 fighters. The value of the deal and the number of weapons involved made it stand out even among the world’s biggest defense players.
South Korean and Polish officials say their cooperation will help them conquer the European arms market even after the war in Ukraine, with Seoul delivering high-quality weapons faster than other countries and Poland providing production capacity and a sales pipeline to Europe.
Reuters spoke to 13 business leaders and government officials, including those directly involved in the deal, who said the agreement provides a blueprint for using international public-private partnerships and consortia to expand Seoul’s reach and its ambition to become a of the world’s greatest weapons. suppliers.
“Czech Republic, Romania, Slovakia, Finland, Estonia, Latvia, Lithuania and others used to think about buying defense products only in Europe, but now it is more known that you can buy cheap and have fast delivery from Korean companies,” said Mr. Oh Kyea-hwan, an executive at Hanwha Aerospace involved in the Poland deal.
South Korean companies do not disclose unit prices for their weapons, which are often sold along with support vehicles and spare parts.
Hanwha Aerospace already had a 55 percent share of the global howitzer market – a number that will rise to an estimated 68 percent with the Poland deal, according to NH Research & Securities research.
The deal created consortia of South Korean and Polish companies that will build the weapons, maintain the fighter jets and provide the framework to eventually supply other European states, said Mr. Lukasz Komorek, director of the Export Projects Office at the Polish Armaments Group, owned by the state. (PGZ).
That includes building South Korean weapons on license in Poland, officials in Seoul and Warsaw said. According to plans, 500 of the 820 tanks and 300 of the 672 howitzers are to be built in Polish factories from 2026.
“We don’t just want to play the role of subcontractor, technology transfer provider and buyer,” Komorek said. “We can both create the synergy and use our experience to conquer the European markets.”
Mr Sash Tusa, a defense and aerospace analyst at UK-based Agency Partners, said that while both countries have well-established defense industries, long-term plans will run into hurdles. Political winds can shift, he said, reducing demand for weapons such as howitzers and tanks.
