September 27, 2022

TrafficMouse

Think Differently

Ukraine war features South Korea’s Hanwha chance to split into Nato defence sector

1 of South Korea’s greatest defence contractors is positioning by itself as a substantial Nato supplier in response to a “surge in demand” as European international locations enhance army paying all through the Ukraine war.

Hanwha Protection, which specialises in artillery methods and armoured vehicles, entered the European defence marketplace in 2014 soon after Russia’s annexation of Crimea by means of a licence to a Polish contractor to establish its Krab self-propelled howitzer.

Due to the fact then, the business has exported versions of its 155mm Nato-compatible K9 self-propelled howitzer to Finland, Norway, Estonia, and Turkey.

“We’ve been equipped to arise as a very trusted spouse, even nevertheless we’re found at a distance [from Europe],” Hanwha Protection main government Son Jae-il stated in an job interview with the Financial Occasions at his company’s headquarters in Seoul.

A subsidiary of Hanwha Group, South Korea’s seventh-major conglomerate, Hanwha Defense expanded its worldwide footprint just after its guardian obtained Samsung’s defence firm Samsung Techwin in 2015. The organization noted an operating revenue of Gained115.6bn ($89mn) last year on sales of Won1.4tn ($1bn).

EU countries have cumulatively declared extra than €200bn in elevated defence paying since Russian president Vladimir Putin’s assault on Ukraine in February.

Hanwha Defense has exported variations of its 155mm K9 self-propelled howitzer to Finland, Norway, Estonia and Turkey © Hanwha Protection

The EU’s European Defence Agency has earmarked replenishing stockpiles depleted by aid for Ukraine and replacing obsolete Soviet-period gear, largely in eastern member states, as a crucial quick-term crucial.

“By constructing our world footprint, in particular in Europe, our best purpose is to arise as a trustworthy lover for Nato itself by creating loads of partnerships with nearby firms in Europe,” reported Son.

Diplomats in Seoul described “sales diplomacy” as a person of the priorities for conservative president Yoon Suk-yeol when he attended the the latest Nato summit in Madrid, a first for a Korean leader.

Desire is notably strong from ex-Warsaw Pact nations this kind of as Poland, which has a wish listing of tanks, self-propelled guns and infantry preventing cars, in accordance to a source with expertise of the condition.

Poland is also looking for to exchange 50 155mm Krab howitzers it exported to Ukraine past thirty day period.

A western diplomat mentioned that the Krabs could not have been sent to Ukraine without the need of the Korean government’s consent, describing the transfer as an “important moment”. Analysts and authorities stated Seoul has in the past been reluctant to upset Moscow or Beijing.

Son claimed that quite a few nations are specially interested in Hanwha’s Redback infantry battling motor vehicle, which is equipped with technological innovation made to evade detection and intercept incoming anti-tank missiles.

“Some international locations are trying to build up their [own] defence market,” claimed Son. “This will be a problem for us, but the surge in demand from customers presently is also an option for us.”

Hanwha’s Redback infantry fighting vehicle
Hanwha’s Redback infantry fighting motor vehicle © Hanwha Protection

In February, South Korea and Egypt signed a $1.66bn offer for Hanwha Protection to provide K9 howitzers to the Egyptian armed forces.

That followed a $3.5bn deal in January among South Korea and the United Arab Emirates for Korean defence firms which includes Hanwha to export midrange floor-to-air missiles to the Gulf condition.

In December, Hanwha signed a $717mn offer to deliver 30 self-propelled howitzers and 15 armoured ammunition resupply vehicles to Australia.

Son claimed that Russia’s new focus on manufacturing substantial-finish defence equipment was an chance for businesses to source “mid-stage conventional tools these types of as howitzers, major fight tanks and other armoured vehicles”.

He singled out India as an example of a place where by Hanwha was profitable contracts in spite of the country’s longstanding ties with Russia.

“We are witnessing a movement from the Indian governing administration away from Russian armed abilities and [away from] applying their systems, so we are anticipating that there will be additional options for us,” mentioned Son.

In Europe, Son discovered the Uk — wherever Hanwha hopes to be part of firms which includes Lockheed Martin to manufacture a customised variation of the K9 for the British Military — as a target market.

Ramon Pacheco Pardo, a professor at King’s College London and Korea chair at the Brussels College of Governance, explained that Seoul’s arms gross sales to countries that regard Russia and China as stability threats mirrored an emerging and extra overt pro-western orientation in Korean policy.

“Arms product sales to Australia, but also to south-east Asian international locations like Indonesia, the Philippines, Thailand or Vietnam upset China — even though arms revenue to Estonia, Norway or Poland have a very clear Russia part,” explained Pacheco Pardo. “But that has not stopped Seoul from likely in advance.”

Supplemental reporting by Henry Foy in Brussels