LIG Nex1 close to winning $3.4 bn surface-to-air missile system contract from UAE

[Source: LIG Nex1 Co.]

South Korea’s defense company LIG Nex1 Co. is expected to supply mid-range surface-to-air missile system M-SAM Block-2 to the United Arab Emirates (UAE), a deal that could top 4 trillion won ($3.4 billion).

LIG Nex1 has moved a step closer to signing a 4 trillion won export contract with the UAE’s defense ministry for the M-SAM II called Cheongung II. When finalized, it would make the biggest Korean arms export, according to industry source on Wednesday.

Shares of LIG Next1 rose 8.26 percent to close at 62,900 won on Thursday on expectations for the windfall.

Korea ranks 10th in the world by national defense spending, exports of defense equipment, the number of global top 100 defense companies and the defense and science technology, according to an October report published by the Federation of Korean Industries (FKI).

It, however, lags behind Israel in all factors excluding the defense spending.

LIG has managed to gain grounds on the external front under strong push by group chairman Koo Bon-sang, experts say.

“LIG Nex1 with an operating margin at only 2-3 percent was able to continue its investment for 15 years thanks to the owner’s will and bold decision,” said an industry official. For example, the company has a research and development center exclusive for exports with near 100-strong staff.

(Second from right) Koo Bon-sang. [Source: LIG Nex1 Co.]

Koo has continuously emphasized the importance of expanding exports as the local defense market relies on annual defense spending of 50 trillion won, according to sources from the company.

LIG Nex1 has so far opened its overseas offices in the UAE, the U.S., Columbia and Indonesia to encourage more challenges and new types of collabo development and production outside Korea.

Currently LIG Nex1 is working on attracting orders from Southeast Asia, the U.S., South America and India. The U.S. exerting the greatest military power in the world is LIG Nex 1’s next target. The company showcased a 2.75-inch rocket at the Sea-Air-Space Exposition 2021 held in Maryland, the U.S. in cooperation with Raytheon.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]