Due to delays in some defense exports originally scheduled last year, the industry has not been able to meet its export targets and is now looking forward to additional exports, including the second contract for the Polish K2 tank, K9 self-propelled howitzers, Cheonmu multiple rocket launchers, FA-50 light combat aircraft, and Cheongung-Ⅱ surface-to-air missiles. The Defense Acquisition Program Administration (DAPA) has stated that it will actively support achieving the largest export in history this year.
According to the industry on the 6th, last year domestic defense companies signed export contracts in various regions, including Europe, the Middle East, and Latin America. On land, Hanwha Aerospace announced it had secured contracts in Poland (72 Cheonmu launchers and guided missiles) and Romania (54 K9 self-propelled howitzers). LIG Nex1 exported Cheongung-Ⅱ surface-to-air missiles (eight batteries) to Iraq, and Hyundai Rotem made its first export of wheeled armored vehicles (30 units) to Peru. At sea, HD Hyundai Heavy Industries exported vessels (four ships) to Peru, while in the air, Korea Aerospace Industries (KAI) exported Surion helicopters (two units) to Iraq for the first time.
Last year's total contract amount fell short of expectations. According to Yoo Yong-won, a member of the National Assembly from the People Power Party, last year's defense export value was provisionally recorded at $9.5 billion (approximately 13.94 trillion won), which was only half of the maximum target of $20 billion (approximately 29.35 trillion won) set at the beginning of the year. DAPA noted, "The defense export scale last year being under $10 billion was due to many export projects being deferred, including negotiations that were prolonged (approximately $9.4 billion worth)."
The second contract for the Polish K2 tank is expected to be signed this year. Poland signed the first contract for 180 K2 tanks worth 4.5 trillion won with Hyundai Rotem and DAPA in August 2022. Since then, negotiations for a second import contract that includes an upgraded model, K2PL (K2 Poland), with local production conditions have been ongoing. The scale is reportedly the same as the first contract, 180 units.
The reason for the delays in contracts is that the local partner, the Polish state defense company PGZ, has been suggesting high prices due to expenses related to factory remodeling, production line setup, and employee training, causing friction with the Polish military. A DAPA official stated, "This is not due to our government's emergency situation but rather stems from differences in positions between local companies and the military," adding that "once negotiations among local stakeholders are finalized, the contract will speed up."
KAI is seeking to finalize additional export contracts for the FA-50 in countries such as the Philippines and Malaysia this year. KAI previously exported 12 FA-50 aircraft to the Philippines in 2014 and secured a performance-based logistics (PBL) contract for maintenance and support services for these aircraft last year. The Philippine government, which is modernizing its defense capabilities, is reviewing plans to acquire an additional 12 FA-50s.
Malaysia signed a contract for 18 FA-50s at the beginning of last year and is currently pursuing a second contract of the same scale. Additionally, KAI is working on exporting both the FA-50 and the Korean next-generation fighter KF-21 to Peru following the November summit between South Korean and Peruvian leaders.
Hanwha Aerospace is reportedly on the verge of signing an additional export contract for K9 self-propelled howitzers with India. Previously, the company exported 100 K9s to the Indian engineering company Larsen & Toubro (L&T) in 2017 under conditions including local production. The Indian government has recently approved a budget for acquiring an additional 100 units. Hanwha Aerospace stated, "Specific terms related to the supply of K9 self-propelled howitzers to India are under discussion with the customer (L&T)."
LIG Nex1 is pursuing an additional export contract for Cheongung-Ⅱ surface-to-air missiles with Saudi Arabia. The company had previously signed a contract worth 4.25 trillion won to export ten Cheongung-Ⅱ batteries to Saudi Arabia in November 2022, and this information was disclosed in February of last year. The industry believes that considering the vast territory of Saudi Arabia, additional orders for more than ten batteries could be placed, and other Middle Eastern countries also have high potential for introduction.
A DAPA official stated, "This year, various projects will be conducted targeting over 20 countries, including K2 tanks, submarines, Cheonmu, air defense weapons, FA-50, KT-1, and maintenance, repair, and overhaul (MRO) of vessels, including deferred projects. We will continue to expand comprehensive government support."