President Yoon Attends NATO Summit, Discusses Tank and Other Contracts with Poland
Including Self-Propelled Guns and Light Attack Aircraft, Worth 10 Trillion Won
Presidential Office: "Aiming to Become 3rd or 4th Largest Defense Exporter"
(Madrid, Spain = Asia Economy Reporter Baek Kyunghwan, Seoul = Military Specialist Reporter Yang Nakgyu, Reporter Lee Gimin) President Yoon Suk-yeol, who is visiting Madrid, Spain to attend the North Atlantic Treaty Organization (NATO) summit, is expected to achieve the first economic diplomacy success in the defense industry sector. Our government has set a goal to become the world's 3rd or 4th largest defense power over the next five years.
Choi Sang-mok, Senior Secretary for Economic Affairs, stated in a briefing on the 29th (local time) that President Yoon engaged in sales diplomacy on defense and nuclear power during the summit meeting with Poland, and visible results in the defense sector are expected soon.
Choi's expectation of visible results in the defense sector is due to Poland's active courting. Poland has already expressed its intention to purchase 180 K2 tanks and 48 FA-50 light attack aircraft. Industry insiders expect that the market for K-defense exports will open up as a huge success, with the 180 K2 tanks alone worth about 3 trillion won, and including K9 self-propelled howitzers and FA-50 light attack aircraft, the total will exceed at least 10 trillion won.
He said, "Defense cooperation between the two countries (Korea and Poland) was discussed in depth, and we expect substantial progress soon. I believe this will be the first achievement of this summit sales diplomacy." He also emphasized, "We will actively pursue orders with the goal of becoming a 'world-class defense power ranked 3rd or 4th' over the next five years."
Choi emphasized becoming a defense power because there is an expectation that this year's defense exports will easily exceed 10 billion dollars (12.5 trillion won). Considering that domestic defense-related exports were 3 billion dollars in 2020, this means more than tripling in two years.
If the defense export target of 10 billion dollars is achieved this year, Korea will enter the top 5 in the global defense market. It will stand alongside traditional defense powers such as the United States, Russia, France, and Germany. The industry estimates that as of June, defense exports have exceeded 5 billion dollars. In February, following the export of K-9 self-propelled howitzers worth 2 trillion won to Egypt, the sale of the Cheongung-II medium-range surface-to-air guided missile, the largest single contract, was a great boost.
Along with this, as the world reexamined weapon systems and increased defense budgets amid the Ukraine war this year, the domestic defense industry is evaluated to be facing more opportunities in overseas markets. There are export projects such as Norway's next-generation tank project (worth 1.7 billion dollars) to be selected by the end of this year, Australia's next armored vehicle (Redback, 5 to 7.5 billion dollars), Poland's FA-50 light attack aircraft (2 billion dollars) and K-2 tanks (at least 300 million dollars), and FA-50 light attack aircraft exports to Malaysia and Colombia (totaling over 1.7 billion dollars).
Along with defense, nuclear power plant orders, considered another key export sector, are focusing all efforts on persuading the Czech Republic and Poland, where project operator selection is imminent. Choi said, "In the case of the Czech Republic, nine memorandums of understanding (MOUs) on nuclear power cooperation between private companies of both countries were signed on the 28th, and nine MOUs on nuclear power cooperation are scheduled to be signed in Poland." He also expressed the intention to intensify the order competition in potential nuclear power construction countries such as the Netherlands and the United Kingdom. During the summit meeting with the Netherlands, Prime Minister Mark Rutte reportedly said, "We know well that Korean nuclear power is a leader, and Korean nuclear power is also being considered as one of the options."
Choi also revealed that he requested supply chain strengthening at each summit meeting. He asked Prime Minister Rutte to expand investment in Korea by semiconductor manufacturing equipment company ASML, and urged Australia to support the entry of Korean companies into the development of key minerals such as nickel, cobalt, and lithium, and to ensure stable supply of key minerals.
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