[The Revival of K-Defense]② Up to $30 Billion More... Continuing the 'Poland Myth'?

Poland's Defense Exports Reach $17.3 Billion Last Year... Largest Scale
KAI Set to Break Record with Successful US Market Export This Year

"We have discussed Poland's plan to additionally procure Korean-made weapons."

President Yoon Suk-yeol and President Andrzej Duda stated this during a joint press conference after their summit held on the 13th (local time) in Warsaw, Poland. Since Poland shares a border with Belarus, a pro-Russian country, it is actively importing K-defense products, which have been developed while confronting North Korea since the Korean War. This is why there are expectations that South Korea's defense exports will gain momentum following President Yoon's state visit to Poland.

According to the defense industry on the 14th, last July the Polish government signed a basic contract to import 48 FA-50 light attack aircraft (KAI), 1,000 K2 tanks (Hyundai Rotem), and 648 K9 self-propelled howitzers (Hanwha Aerospace) from Korea. Based on the $12.3 billion export to Poland, South Korea's defense export orders last year reached $17.3 billion, marking the largest annual scale ever.

The government estimates that this has created 130,000 jobs and a production inducement effect worth 46 trillion won. The government has set a goal to surpass a 5% share of the global defense export market by 2027 and become one of the world's top four defense exporters.

Up to $30 Billion Expected for K-Defense Exports This Year

The outlook for this year is also optimistic. With Poland announcing a second procurement plan through this summit, there is a forecast that orders could reach up to $30 billion.

In addition, countries other than Poland are sending love calls to K-defense. Domestic defense companies plan to aggressively target ASEAN (Association of Southeast Asian Nations), Central and Eastern Europe including Poland and Turkey, leveraging excellent cost-effectiveness. The largest project is the U.S. Navy's advanced and tactical trainer and Air Force tactical trainer program. For this project, Korea Aerospace Industries (KAI) formed a 'joint team' with Lockheed Martin, leading with the first domestically produced supersonic advanced trainer T-50.

If KAI and Lockheed Martin jointly win the contract, it will be the largest defense export in history. The price per T-50 unit ranges from $20 million to $25 million (24.4 billion to 30.5 billion won). This is equivalent to exporting 1,500 compact cars priced at 20 million won each. If successful in entering the U.S. market, KAI is expected to hold over 50% market dominance in the overseas advanced trainer and light fighter market.

Challenges in Exporting Fighters, Submarines to Vietnam, Canada, UK, etc.

KAI is also evaluated to have established an Asia-Pacific security belt centered on Korean-made aircraft. Last year, KAI signed a mutual cooperation memorandum of understanding with Vietnam's local aerospace company VTX to develop the rotary-wing aircraft sector. This agreement is seen as a prelude to exporting the Surion helicopter, which was developed with domestic technology. The development of various derivative helicopters based on the Surion is expected to be a strong advantage for future exports. The Surion has over ten derivative models based on the basic utility helicopter, actively serving in police, firefighting, forestry, and coast guard roles.

There are also significant maritime projects. Canada plans to retire its aging diesel submarines and introduce 8 to 12 diesel submarines of 3,000 tons class, with a scale reaching 80 trillion won. The Philippines is seeking offshore patrol vessels (OPVs). Demand is rapidly increasing for anti-piracy, drug enforcement, and exclusive economic zone (EEZ) patrols, but deploying expensive advanced naval vessels is cost-ineffective and negatively impacts military operations. The domestically developed OPV has a displacement of 2,450 tons and is equipped with a 76mm naval gun and a close-in weapon system (CIWS). It also has a deck where helicopters or unmanned aerial vehicles can take off and land.

South Korea will also challenge the UK's next-generation self-propelled howitzer project (MFP) worth about 1 trillion won, scheduled for 2026. The biggest advantage of domestic land weapons is cost-effectiveness. They guarantee sufficient performance at an attractive price and have excellent 'timely delivery' capabilities, which is one of the key factors in defense capability improvement. The price of the K9 self-propelled howitzer is less than half that of the German competitor PzH2000. Although the K2 tank faced setbacks in the Norwegian bid, the global defense industry consistently evaluates that it offers much better price-to-performance compared to the competing German Leopard 2A7.

Pungsan is targeting the market for 105mm shells used in the 'Harimau' light tank, which is the mainstay of the Indonesian Army. The 105mm shell is a product only produced in Korea and Europe. All rifles, tank guns, and self-propelled artillery shells produced by Pungsan meet the standards of both the U.S. and NATO. Therefore, they plan to actively highlight weapon system compatibility and target the Southeast Asian market, including Indonesia. A Defense Acquisition Program Administration (DAPA) official said, "DAPA plans to support not only defense companies but also related organizations to ensure that defense exports continue to achieve results."