As meetings between Korea's defense industry and Saudi Arabia continue, export expectations are growing. Saudi Arabia is carrying out a modernization program to overhaul its military weapons systems and build a defense ecosystem. It is part of Vision 2030 to reduce reliance on oil. The government and the defense industry have been creating cooperation opportunities every year since 2023 to participate in the project.
According to the defense industry on the 23rd, Minister of National Defense Ahn Kyu-baek held talks with Minister Abdullah Abdullah bin Bandar of the Ministry of National Defense in Saudi Arabia on the 21st (local time). The head of the Defense Acquisition Program Administration has visited Saudi Arabia twice this year, and the Minister's visit is the first this year. Before the talks with Saudi Arabia, private companies including Hanwha Aerospace (Hanwha Aero) asked the government for export support.
According to Middle Eastern media including Arab News, Saudi Arabia's defense budget is increasing every year. The defense budget, which was $75.8 billion (about 105 trillion won) in 2024, has risen to $78 billion (about 108 trillion won) this year. That is about 21% of the Saudi government's total expenditure. There are expectations it will increase further next year.
Saudi Arabia is spending a significant portion of its defense budget on localizing the defense industry. In May, Saudi Arabia teamed up with British defense company BAE Systems for maintenance, and in Jul., it signed a contract with a Turkish defense company to begin local production of armored vehicle hulls and turrets. With U.S. company Lockheed Martin, it has been manufacturing THAAD launcher components in Saudi Arabia since May this year.
Local production and technology transfer are also expected to be included in cooperation under discussion with Korea. Minister Abdullah visited Korea in Nov. last year and observed the operation of the K9 self-propelled howitzer and the K30 Biho complex system. Saudi Arabia also showed interest in Hanwha Aero's Redback armored vehicle. A government official said, "The weapons included in Saudi Arabia's ground forces modernization project are the entire spectrum of ground weapons."
Some have voiced concerns. This is because winning contracts in the Middle East is far more challenging than in other countries. It took 13 years for Hanwha Aero to export a package including K9 self-propelled howitzers and K10 ammunition resupply vehicles to Egypt.
A defense industry official said, "In the Middle East, defense is often handled by the royal family. Things can proceed well and then suddenly fall apart, and a project that showed no lead can suddenly be resolved (by a royal decision)."