S. Korean defense firms busy setting up subsidiaries in Europe

Hanwha Aerospace Co.’s infantry fighting vehicle Redback. [Courtesy of Hanwha Aerospace]

South Korea’s defense industry is intensifying its drive to solidify its overseas business base, aiming to secure favorable positions in future procurement competitions. The strategy involves creating production facilities or bases in countries that have shown interest in or are potential buyers of Korean-made weapons.

According to industry sources on Tuesday, Hanwha Aerospace Co., a defense unit under Hanwha Group, completed the entity registration process for “Hanwha Aerospace Europe” in Poland during the first half of this year, which signifies Hanwha Aerospace’s first physical entry into Europe.

Earlier in the year, Hanwha Group streamlined its defense enterprises, combining Hanwha Corp., Hanwha Defense Co., and Hanwha Aerospace into a unified entity called Hanwha Aerospace. The establishment of the European subsidiary represents the first overseas base initiated by Hanwha’s defense sector post-consolidation. The decision to establish in Poland as the inaugural European base stems from the escalating demand for conventional weaponry in Eastern European nations, particularly in the aftermath of the war in Ukraine.

In the second half of last year, Hanwha Aerospace signed a contract with Poland to supply weapons worth 8.2 trillion won ($6.21 billion), including K9 self-propelled howitzers and Chunmoo multiple-rocket launchers. Negotiations are also underway to export the Redback, a next-generation armored vehicle, to Poland.

South Korean defense companies, which are staking their survival on exports, are actively establishing bases in countries that are potential buyers of their weapons. Last month, Korea Aerospace Industries Ltd. (KAI) opened an office at a Polish Air Force base in Minsk.