Seoul: South Korea continues to secure its spot among the elite top ten defense exporters worldwide, showcasing strong capability and strategic vision within the global defense arena. Achieving about $14 billion in defense exports for 2023, the nation holds its ninth position globally, trailing Spain. This accomplishment shines with expectations for sustained demand this year, supported by significant agreements already underway.
Reports from the Korean Ministry of National Defense and local defense firms indicate Korea’s market expansion to 12 countries last year, a leap from four in 2022. Notable new agreements with the United Arab Emirates, Finland, and Norway contributed to this growth, alongside a diversification in the types of weapon systems exported.
Aiming for a top-four global defense exporter status by 2027, South Korea targets a market share exceeding 5 percent, up from 2.4 percent. Large-scale contracts drive this ambition, with a $12.4 billion deal with Poland in 2022, a response to elevated defense needs following Russia’s invasion of Ukraine, significantly contributing to over 35 percent of the nation’s annual defense spending.
- Record exports: South Korea maintains top ten ranking with $14 billion revenue, securing new markets and diversifying weapons.
- Ambitious goals: Aims to become top four exporter by 2027, bolstered by Poland, Saudi Arabia, and potential Romania, Poland, Egypt, and European deals.
- Finance hurdle: Government seeks to improve export finance system to facilitate larger contracts.
- Online success: $42 million deal secured through pre-exhibition business counseling.
- Tech showcase: LIG Nex1 unveils Cheongung-II missile system at World Defense Show, securing ten-unit order from Saudi Arabia.
- Strategic partnership: South Korea and Saudi Arabia strengthen collaboration, focusing on anti-air defense systems.
Early this year, LIG Nex1 announced a $3.2 billion contract with Saudi Arabia for the M-SAM2 ballistic missile interceptor system. Hanwha Aerospace, with a leading global defense order backlog, anticipates new orders worth billions, with its backlog increasing from $2.4 billion to $15.2 billion over two years.
Current negotiations aim to export K-9 self-propelled artillery to Romania and multiple launch rocket systems to Poland. Korea Aerospace Industries and Hyundai Rotem are close to securing substantial orders, with aircraft export discussions with Egypt and European nations, and agreements for K-2 tanks to Poland.
Challenges persist for South Korea, particularly around enhancing the export finance support system to enable larger-scale exports, encompassing export credit, insurance, financial guarantees, and risk management.
South Korean firms achieved a $42 million export deal through online business counseling before presenting at a major Middle Eastern defense exhibition. This deal served as a precursor to their participation in the event in Saudi Arabia, featuring over 700 exhibitors from 45 countries.
KOTRA led this initiative, involving 15 South Korean companies and 24 Middle Eastern buyers before the World Defense Show (WDS) 2024 in Riyadh. The online sessions resulted in a significant export agreement.
KOTRA officials promise continuous support for the exporting efforts of firms at the WDS, aiming to boost the international presence of small and medium-sized defense companies.
At WDS 2024, LIG Nex1 displayed the Cheongung-II, a state-of-the-art medium-range surface-to-air missile system, capable of intercepting aircraft and ballistic missiles. This system can launch up to eight guided missiles, offering 360-degree threat response. An agreement with Saudi Arabia in November 2023 to supply ten Cheongung II units illustrates South Korea’s advanced defense capabilities.
A reinforced strategic partnership between South Korea and Saudi Arabia, confirmed in discussions between President Yoon Suk-yeol and Saudi Arabia’s Crown Prince Mohammed bin Salman in October 2023, emphasizes military arms provision, especially anti-air defense systems. This collaboration marks a significant advancement in South Korea’s defense export strategy and solidifies its unwavering position in the global defense industry.
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