K-2 Tank and K-9 Self-Propelled Howitzer First Contract Signed... Record Highest Ever

Entering Top 5 Defense Export Market Next Month with FA-50 Export Contract
Redback Competes in Australia's Next Armored Vehicle Project, Showing Promise

[Asia Economy Yang Nak-gyu, Military Specialist Reporter] On the 26th (local time), Hyundai Rotem and Hanwha Defense will each sign the first main export contracts for the K2 tank and K9 self-propelled howitzer with the Polish government. This marks the first export case to Europe and the North Atlantic Treaty Organization (NATO), and the contract scale is the largest ever in South Korea's defense industry exports. If the exports proceed smoothly, South Korea's defense export amount this year is expected to exceed $15 billion, entering the top 5 in the global defense export market.

A defense industry official said on the 26th, "The first main export contracts for the K2 tank and K9 self-propelled howitzer will be signed at 6 p.m. local time in Poland (1 a.m. Korean time on the 27th)."

At the end of last month, Poland signed a basic contract (preliminary contract) with Hyundai Rotem for 980 K2 tanks, Hanwha Defense for 648 K9 self-propelled howitzers, and Korea Aerospace Industries (KAI) for 48 FA-50 light attack aircraft. The project scale is estimated to be over 25 trillion won, and including maintenance and ammunition, it is known to exceed 40 trillion won.

Poland plans to import 48 units first under the first main contract for the K9 self-propelled howitzer, some of which will be delivered within the year to fill gaps caused by support to Ukraine. The K2 tanks and K9 self-propelled howitzers included in the second main contract currently under negotiation are reported to be produced locally in Poland.

Due to the recent Russian invasion of Ukraine, demand for light attack aircraft in Europe has significantly increased, and the main contract for the FA-50 light attack aircraft is expected to be signed next month.

KAI also plans to establish an aircraft maintenance, repair, and overhaul (MRO) center in Poland. Many European countries mostly operate former Soviet MiG-29 fighters or Italian M-346 attack aircraft. Due to poor parts supply, their operational rates have fallen below 50%. Considering that the European light fighter market amounts to about 200 units, Poland's MRO center is expected to serve as a hub for surrounding European countries.

With the signing of the main export contract for Poland's defense industry, the scale of domestic defense exports is expected to jump into the world's top 5. Until 2020, South Korea's defense export scale was only $2 billion to $3 billion annually.

Domestic defense companies are also exploring exports to major countries. KAI plans to target the global trainer and light attack aircraft market, estimated at over 500 units, including the United States. The U.S. plans to introduce about 200 Air Force tactical trainers and 220 Navy advanced trainers (160 units) and tactical trainers (65 units) around 2024-2025. KAI's strategy is to capture 37% of the light fighter market (about 2,800 units) starting with the U.S.

Exports to Australia and Norway are also actively underway. South Korea's next-generation armored vehicle, Redback, is a strong candidate for Australia's next armored vehicle project ($5 billion to $7.5 billion). There is a high possibility of exporting Cheongung-2 interceptor missiles, next-generation frigates, and Biho complex (mobile anti-aircraft gun) air defense systems (over $6 billion) to Saudi Arabia; FA-50 light attack aircraft (totaling over $1.7 billion) to Malaysia and Colombia; and K2 tanks (over $1.7 billion) to Norway.