[비즈한국] South Korean defense companies have officially entered the International Defence Industry Exhibition (MSPO) in Poland, which kicked off on the 3rd. As the event coincides with the 25th anniversary of Poland's NATO accession and features a massive turnout from advanced nations like those in Europe and the U.S., attention is focused on what kind of results domestic companies can achieve amidst fierce competition. In particular, eyes are on whether the remaining arms export contracts currently being negotiated between Poland and domestic firms like Hyundai Rotem064350 and Hanwha Aerospace012450 will be finalized.
Unveiling Next-Generation Weapons While Targeting the NATO Market
The ‘International Defence Industry Exhibition (MSPO) 2024,’ officially sponsored by the Polish Ministry of National Defense and the state-owned defense group PGZ, is being held in Kielce, central Poland, from the 3rd to the 6th. MSPO is an integrated land, sea, and air defense exhibition held annually since 1993. It is the third-largest of its kind in Europe, following the DSEI in London, UK, and Eurosatory in Paris, France.
This year's event was organized to emphasize the NATO alliance, marking the 25th anniversary of Poland joining the organization. It is reported that major defense powers within NATO, such as the U.S. and the U.K., have increased their participation compared to previous years. Approximately 800 companies from 35 countries around the world are scheduled to participate.
Poland showed particular interest in Korean defense companies even before the event. On the 1st of last month, the exhibition organizers featured the participation of Korean defense firms on their website with a headline reading, “South Korean defense industry takes its best step at MSPO 2024,” and referred to them as an “Asian tycoon.” Poland imported a massive amount of weapons from South Korea in 2022, including fighter jets, self-propelled howitzers, and tanks. Recently, Korean weapons such as K2 tanks, Chunmoo multiple rocket launchers, and K9 self-propelled howitzers were prominently featured at Poland’s "Armed Forces Day" parade.
Our companies, aiming to enter the NATO market, unveiled a large number of next-generation weapons capable of competing with advanced European systems. The three Hanwha defense affiliates (Hanwha Aerospace, Hanwha Systems272210, and Hanwha Ocean042660) were the only domestic firms to reveal a 1/10th scale model of the Jangbogo-III Batch-II submarine. This is part of their effort to participate in the Polish government's naval modernization project and secure the 3.35 trillion won 'Orka Project.' Their competitors in this bid include France’s Naval Group and Germany’s TKMS.
Hyundai Rotem exhibited its 4th-generation Multi-Purpose Unmanned Ground Vehicle (UGV), the ‘HR-Sherpa.’ Although two units have previously been delivered to the South Korean military, this marks the first public reveal of the physical model at any exhibition, domestic or international. The HR-Sherpa is a latest-generation unmanned vehicle developed in collaboration between Hyundai Rotem and Hyundai Motor Company005380. It utilizes AI and autonomous driving technology to perform various operations and missions, such as surveillance, reconnaissance, combat, and the transport of wounded soldiers and supplies, in place of human personnel.
A defense industry official explained, “Poland faces security threats as it borders the Russian exclave of Kaliningrad and Russia’s ally Belarus, but it is concerned about increasing its troop levels. If we offer unmanned solutions that can perform search and armed response without the need for large numbers of troops, it could be very appealing.”
Hyundai Rotem Signs Consortium Agreement for Remaining 820 K2 Tanks
In the defense industry, attention is focused on whether the remaining arms contracts between Poland and companies like Hyundai Rotem and Hanwha Aerospace will be signed during this exhibition. As security threats have escalated following Russia's invasion of Ukraine, Poland is accelerating the introduction of weapon systems and investing massive amounts into its defense budget to bolster its military power.
After signing a framework contract with Poland in 2022 to supply 1,000 K2 tanks, Hyundai Rotem completed a first contract for 180 units that same year. No specific contract has yet been signed for the remaining 820 units. Industry insiders expect these remaining contracts to be finalized during this MSPO. Seok Jong-gun, Minister of the Defense Acquisition Program Administration, also attended Eurosatory 2024 in Paris last June and mentioned that there is a high possibility that the second execution contract for K2 tanks will be signed around the September MSPO.
In July, Hyundai Rotem signed a new consortium agreement in Poland with PGZ for the second implementation contract of the Polish-variant K2 tank (K2PL) and is accelerating negotiations.
The implementation of the remaining K9 self-propelled howitzer contract is also gaining speed. Hanwha Aerospace signed a framework contract with the Polish Armament Agency in 2022 for 672 K9 units. Of these, the first contract for 212 units has already been confirmed and is currently being delivered.
The execution of the second contract, involving the delivery of 152 units worth 3.4475 trillion won, has been delayed due to financial arrangement issues. However, with the Polish Armament Agency recently deciding to enter into financial agreements with foreign financial institutions, the contract implementation is picking up steam. An industry official who requested anonymity explained, “I understand that key defense-related figures, including the Polish Minister of National Defense, are scheduled to visit Korea in October. They are expected to see various Hanwha Aerospace weapons firsthand and hold further discussions.”