Luxury K-Defense Made in Changwon Expands Globally

Hyundai Rotem, Hanwha Aerospace and Other Defense Companies Located in Changwon, Elevate K-Defense Status Further in Poland

Hong Nampyo, Changwon Special Mayor, "We Will Support Export Expansion and Mutual Growth of Defense System Companies and Sma

With growing global interest in security, K-defense industry is making new history every day by achieving its highest-ever export performance (17.3 billion USD in export orders in 2022).

In particular, at the MSPO International Defence Industry Exhibition held in Kielce, Poland from September 5 to 8, South Korea played the role of a Leading Country, elevating the global status of K-defense.

Changwon Special City is home to leading domestic defense companies such as Hanwha Aerospace and Hyundai Rotem, and is focusing on nurturing the defense industry alongside the nuclear power industry as future growth engines. Changwon City is striving to achieve a ‘Changwon Defense Industry Renaissance’ through win-win growth between large and small and medium-sized local defense companies, revitalizing the regional economy.

◆ Changwon Special City Promoting Defense and International Cooperation Diplomacy in Poland

At the Hyundai Rotem booth, in order: Hong Nam-pyo, Changwon Special City Mayor; Lee Yong-bae, Hyundai Rotem CEO; Andrzej Duda, President of Poland (blue necktie).

Recently, Changwon Special City was officially invited to participate in the MSPO International Defence Industry Exhibition in Poland (September 5 to 8). On the opening day, September 5, Changwon Mayor Hong Nam-pyo visited the Korean Pavilion and, together with Andrzej Duda, President of Poland, and defense officials, listened to explanations about defense products from company representatives and took time to promote and exchange information about K-defense.

Furthermore, Changwon signed a ‘Win-win Cooperation Agreement for Co-growth between Large and Small and Medium-sized Enterprises’ with Hanwha Aerospace and Hyundai Rotem, key system companies in the defense industry, at their local booths. The agreement includes expanding exports and activating joint overseas ventures between system companies and partner companies.

Mayor Hong also visited the booth of ‘WZM,’ a company under the Polish state-owned defense group PGZ, introducing local defense companies and discussing cooperation plans. ‘WZM’ signed a memorandum of understanding in March with Hyundai Rotem for the production and delivery of the Polish version of the K2PL tank consortium. The company is located in Pozna?, with which Changwon signed an international friendship city agreement on the 9th. Changwon plans to strengthen exchanges with Pozna? in various ways.

Mayor Hong stated, “Until the day K-defense stands tall in the global market, Changwon will actively support export expansion and co-growth of defense system companies and small and medium-sized partner companies,” adding, “To further activate industrial and economic exchanges between the two countries, it is important to establish cooperation systems at each level, including cooperation between cities as well as between central governments.”

◆ Changwon City’s Efforts to Revitalize Premium K-Defense and Win-win Cooperation between Large and Small and Medium-sized Defense Companies

Mayor Hong, who set the administrative vision for the 8th term as ‘Northeast Asia Central City Changwon,’ expressed a strong will to revitalize Changwon’s economy focusing on nuclear power and defense industries from the outset of his term and has been continuing activities to realize this.

In August last year, the main export contracts for Hyundai Rotem’s K2 Black Panther tank and Hanwha AS’s K9 self-propelled howitzer to Poland were signed, with the first contract alone amounting to a massive 7.7 trillion KRW. To ensure that this export boom leads to co-growth of Changwon’s small and medium-sized defense companies, on August 26 of the same year, Changwon signed a ‘Regional Defense Companies Win-win Cooperation Agreement’ with Hyundai Rotem, Hanwha AS, the Changwon Defense Industry Small and Medium Enterprises Council, and the Changwon Industry Promotion Agency.

The main contents of the agreement included ▲mutual cooperation for participation of local small and medium-sized defense companies ▲support for prototype production and test evaluation support companies ▲cooperation from system companies (Hanwha AS, Hyundai Rotem) to discover required items to expand participation of local small and medium venture companies ▲active technology development by the council to secure competitiveness and expand participation of small and medium-sized companies. The goal was to increase the participation of local small and medium-sized defense companies in K-defense exports and cooperate in discovering required items.

In October last year, a shipment ceremony for the K2 tank and K9 self-propelled howitzer for export to Poland was held. The event took place at Hanwha Defense’s first plant and Hyundai Rotem’s Changwon plant, attended by the Army Commander representing Poland and the Ambassador to Korea. Mayor Hong, who attended the ceremony, pledged to support Changwon’s defense industry to freely access the global market.

This year, projects such as ▲support for technology strengthening of small and medium defense companies ▲support for enhancing technology competitiveness of aerospace parts ▲network support projects for defense and aerospace parts ▲customized training and support projects for defense industry professionals ▲projects to activate exports of defense aviation parts are underway to strengthen network activities and create synergy among small and medium-sized defense and aerospace parts companies and companies planning to enter related fields in the region.

Entering its fourth year, the Defense Innovation Cluster pilot project is being advanced, and to activate defense exports, the 2023 Seoul International Aerospace and Defense Industry Exhibition (ADEX 2023), scheduled for October, will establish the largest-ever joint pavilion for small and medium-sized enterprises, focusing on export marketing support. Alongside this, related companies are actively promoted to participate in Defense Acquisition Program Administration (DAPA) R&D public projects, and connections with the Changwon Industry Promotion Agency and DAPA One-Stop Support Center are supported to increase participation in various public projects. Efforts are focused on intensive support for defense R&D projects and securing national funding.

◆ Changwon Defense and Nuclear Power Convergence National Industrial Complex

Hong Nampyo, Mayor of Changwon Special City, Gyeongnam, is explaining the new National Industrial Complex 2.0.

At the 100-day press conference after his inauguration on October 4 last year, Mayor Hong Nam-pyo announced plans to secure Changwon’s future growth engines by developing a new concept national industrial complex specialized in defense and nuclear power (Changwon National Industrial Complex 2.0), beyond the existing national industrial complexes.

Despite the short preparation period, by concentrating administrative capabilities, Changwon was the only city in Gyeongnam selected as a new national industrial complex candidate site among 15 nationwide announced by the Ministry of Land, Infrastructure and Transport in March.

The new complex will be developed in Dong-eup and Buk-myeon areas of Uichang-gu, covering 3.39 million square meters, with an estimated investment of 1.4215 trillion KRW by 2030 (planned). It is planned to be developed around three pillars: research, production, and convergence, and is expected to be finally approved in 2027 after procedures such as business operator selection and lifting of development restrictions. Changwon is referencing world-renowned defense cities such as Grenoble in France and Sendai in Japan. These two cities have state-of-the-art large-scale research facilities jointly used by companies, enabling related companies to cluster and continuously conduct R&D, achieving global competitiveness.

◆ Renaissance Era of Defense Industry, Future Prospects

The upward trend in the defense sector is expected to continue. In July, Hanwha Aerospace, led by the Redback armored vehicle, was selected as the preferred negotiator for Australia’s next-generation infantry fighting vehicle project. Additionally, several countries including Romania, the Czech Republic, and India have shown interest in K-defense.

Changwon City is also leading the boom in the defense sector and the creation of a healthy defense ecosystem at the local government level. The ‘Win-win Cooperation Agreement for Co-growth between Large and Small and Medium-sized Enterprises’ signed during the MSPO International Defence Industry Exhibition in Poland between Changwon City and key defense system companies Hanwha Aerospace and Hyundai Rotem is the first step. This is significant as it represents joint efforts by local government and system companies.

Moreover, Changwon is accelerating the rapid development of ‘Changwon National Industrial Complex 2.0’ with the goal of ‘concentrating more K-defense companies in Changwon to create synergy together.’

Mayor Hong said, “To achieve sustainable development of Changwon’s defense industry, Changwon will continuously support win-win cooperation and co-growth between large and small and medium-sized local defense companies,” adding, “Due to the nature of the defense market, contact between related government agencies and companies is important. Changwon will do its utmost to activate exports and build networks so that defense companies can expand globally.”