The rift that erupted after LIG Nex1, the system integrator of Cheongung-II, dubbed the "Patriot missile of Korea," signed an export contract with Iraq without consulting Hanwha Aerospace and Hanwha Systems, which developed the launcher and radar, was finally settled on the 27th. As a result, the 3.7 trillion won export of Cheongung-II is expected to proceed as normal.
Hanwha Aero and Hanwha Systems on the day finalized parts contracts with LIG Nex1 for Cheongung-II exports to Iraq. Accordingly, the two Hanwha Group defense companies will supply LIG Nex1 with a total of 1.477 trillion won worth of parts, including launchers and a multi-function radar (MFR). Specifically, Hanwha Systems signed an 860 billion won contract to supply the MFR, while Hanwha Aero signed a 388 billion won launcher contract and a 229 billion won launch tube and components contract, respectively.
The two Hanwha Group defense companies plan to modify the Cheongung-II export model that was supplied to Saudi Arabia and the United Arab Emirates (UAE) to suit Iraq's conditions and then deliver it. A Hanwha Aero official said, "To support exports, we will establish a close cooperation framework with domestic corporations, which will help strengthen the air defense capabilities of the importing country as well as contribute to Korea's national competitiveness and national interest." An LIG Nex1 official said, "We will carry out the Iraq export project in a stable manner."
The dispute between LIG Nex1 and Hanwha began in September last year. It started when LIG Nex1 signed an export contract with the Iraqi government without agreeing with Hanwha on supply prices and delivery dates. At the time, Hanwha expressed concern that proceeding without agreement would make delivery itself difficult. There were even projections that the Iraq export could fall through, but after the National Assembly and the Defense Acquisition Program Administration stepped in to mediate, the companies agreed in November last year to "smooth exports."
LIG Nex1 said there is a convention that the system integrator leads export negotiations and that it developed the core technology for missiles to strike targets, while Hanwha emphasized that two of its companies took part in developing Cheongung-II and have a larger stake, and negotiations ran in parallel. However, with the contracts signed on the day, the conflict has been completely resolved, and exports to Iraq are expected to proceed normally. The volume and delivery schedule for Cheongung-II exports to Iraq are undisclosed at Iraq's request.
Cheongung-II is an indigenous missile air-defense system. It is a medium-range, medium-to-high altitude surface-to-air weapon that detects aerial targets such as enemy aircraft or missiles and shoots them down with missiles. Its maximum intercept altitude is 15 km, lower than the U.S. Patriot (20 km). However, the unit price of a missile is about one-third that of the U.S. system, earning it high marks for cost-effectiveness. Before the Iraq deal, it was exported to the UAE and Saudi Arabia.