Korean defense companies are set to continue their growth trajectory this year by securing additional orders from various countries around the world. Building on last year’s momentum, which saw an expansion in both the range of export destinations and weapon systems, these companies are aiming for qualitative growth.
According to the defense industry on Jan. 28, Korean defense companies like Hanwha Aerospace, Korea Aerospace Industries (KAI), Hyundai Rotem, and LIG Nex1 are expected to add more countries to their client list this year. Countries where exports are highly likely include Romania, Egypt, and Saudi Arabia.
Romania has emerged as a major new customer. LIG Nex1 is anticipated to be the first Korean company to break news in Romania. The Eastern European nation is pursuing the acquisition of portable surface-to-air guided weapons Shingung in a deal worth US$90 million for 54 units. This deal, if finalized, would mark the first export of a Korean weapons system to Romania.
Egypt and the UAE are in negotiations with KAI for the FA-50 and the Surion helicopter, respectively. KAI is engaging with Egyptian authorities to export fighter jets, a crucial element in Egypt’s African security strategy. Egypt has indicated a requirement for 36 aircraft. The Philippines and Uzbekistan are also showing interest in the FA-50.
Saudi Arabia and Malaysia are considering the introduction of Cheongung-II. LIG Nex1, having secured a US$3.5 billion export contract with the UAE in 2022, has built trust in the Middle East. This accumulated credibility of the Korean defense industry could translate into tangible success.
Malaysia, maintaining friendly relations, signed a contract last year for 18 FA-50 light attack aircraft worth 1.2 trillion won (US$898 million), and discussions are ongoing for an additional 18 aircraft. Malaysia, in the midst of modernizing its military, plans to undertake acquisition projects worth US$36.2 billion by 2032.
Korean defense companies are not just increasing their order volumes; they are also aiming for a year of qualitative growth in terms of both scale and profitability. They are diversifying their export dependencies from countries like Poland to a wider range of nations. According to the Ministry of National Defense, the number of export destinations, which was limited to four countries including Poland in 2022, expanded to 12 last year, including the UAE and Finland, across the Middle East and Europe -- a threefold increase. The range of exported weapon systems also doubled from 6 to 12. The defense export volume this year is expected to exceed US$20 billion, up from last year’s US$13 billion.