Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
Europe, Middle East emerge as key markets for Korean defense firms
Hanwha Aerospace's K9 self-propelled howitzer / Courtesy of Hanwha Aerospace
By Lee Min-hyung
Defense stocks post triple-digit gains on strong exports
Europe and the Middle East are emerging as major export markets for Korean defense firms as geopolitical tensions fuel demand for advanced weapons systems.
Major Korean defense firms are expanding production networks in Central Europe while stepping up sales efforts in the Middle East, where intensifying regional clashes following recent U.S. and Israeli strikes on Iran have accelerated military procurement.
In Europe, the defense firms are reshaping their strategies to localize their production system and strengthen regional supply chains.
Hyundai Rotem plans to deliver 61 K2PL tanks produced in Poland to the country’s military between 2029 and 2031.
The company has also signed a technology transfer contract with Polish defense firm Bumar that includes not only tank manufacturing but maintenance, repair and overhaul capabilities.
Hanwha Aerospace is pursuing a similar strategy in Romania. The company began construction in February on a plant to produce K9 Thunder self-propelled howitzers and K10 ammunition resupply vehicles.
The Romanian facility will handle not just assembly and testing, but maintenance operations. Additionally, the plant will be used as a key production base for manufacturing infantry fighting vehicles and unmanned ground vehicles in the future.
The company is also scheduled to build an ammunition plant in Estonia, with an annual production capacity of 300,000 rounds of 40 millimeter ammunition.
Other local defense firms are rapidly expanding their presence in the Middle East amid regional military tension.
A Cheongung-II medium-range surface-to-air missile is launched at a virtual target along the West Sea coast, Nov. 6, 2024. Courtesy of the Joint Chiefs of Staff
The Cheongung-II, a medium-range surface-to-air missile system developed by LIG Nex1, reportedly achieved an interception rate exceeding 90 percent in the United Arab Emirates as the country defends against missile and drone attacks from Iran.
The UAE requested early delivery of the system, with reports indicating that a military aircraft from the UAE recently arrived in Korea to transport dozens of the interceptor missiles.
Industry officials said the geopolitical conflict in the Middle East has come as a boon for Korean defense firms, as the performance of their weapons is increasingly recognized by overseas armed forces.
“Korean defense players have core strength in price competitiveness and fast delivery, which raises hopes for them to win more major deals in other countries in Europe and the Middle East,” a defense industry official said.
The rapid global expansion of local defense firms has also fueled strong interest from investors. Shares of LIG Nex1 have grown more than 95 percent over the past three months as of Thursday, while Hanwha Systems stock prices surged by over 170 percent during the same period.