Hanwha dreams of becoming Asia's Lockheed Martin

By Lee Min-hyung

Hanwha Group is on track to rearrange its defense affiliates, seeking to join the ranks of the global top-tier defense industry contractors such as Lockheed Martin.

Under an organizational reshuffle, Wednesday, the nation's eighth-largest conglomerate split Hanwha Techwin into two separate companies — Hanwha Aerospace which manufactures aerospace equipment and Hanwha Techwin which develops defense security systems.

This came as part of Hanwha's group-wide efforts to tap deeper into the lucrative aerospace components industry, as the market comes with huge growth potential amid growing demand for aircraft engines.

Hanwha Techwin, which has so far manufactured aerospace and security systems, will focus solely on developing security and surveillance machinery, according to Hanwha.

In particular, Hanwha Aerospace's key revenue areas include jet and helicopter engines. The company has globally renowned clients — such as General Electric and Rolls-Royce.

In a launch event Wednesday, Hanwha Aerospace CEO Shin Hyun-woo called on employees and executives to share a common goal of becoming the global No. 1 aircraft engine manufacturer.

The reorganization of the affiliates reflects Hanwha's bid to develop expertise and maximize management efficiency in each defense equipment area — such as jet engines, energy equipment and security machines. Hanwha Techwin has so far handled a variety of businesses encompassing aeronautics, automation and weapons.

Last year, Hanwha set its annual sales goal at 11 trillion won ($10.38 billion) by 2025, and becoming one of the world's 10 largest defense equipment manufacturers. The company's annual defense sales topped 4.3 trillion won as of last year, which is the 19th-largest across the globe.

“The latest organizational reshuffle is aimed at enhancing our professionalism in each specific defense industry,” a company official said. “Under the new structure, we are going to further expand our global profile by increasing the overseas sales volume.”

Hanwha's flagship defense equipment includes the K9 Thunder self-propelled howitzer. The company began its first overseas sales ofthe weapon in 2001 toTurkey. Hanwha then expanded its sales to Poland, India and Finland.

“The new organizational structure is also expected to help us to maximize capabilities for each affiliate,” the official said. “The launch of Hanwha Aerospace is particularly our big step forward to become one of the world's leading aviation technology and components manufacturers.”

The annual sales for Hanwha's aerospace engines topped 1.05 trillion won in 2016, up more than 65 percent from 2012.