Invest KOREA

According to The Korea Economic Daily Global Edition,

South Korea has become the world’s eighth-largest arms exporter, with its exports rising threefold – the fastest pace among the world’s top 10 weapons exporting countries.

According to the Export-Import Bank of Korea, Korea’s weapons exports reached an all-time high of $7 billion in 2021, buoyed by the K9 self-propelled howitzers, artillery, convoy vessels and warplanes.

The country’s arms exports over the 2017-2021 period increased 176.8% from the preceding five-year period, the EXIM Bank said, citing data from the Stockholm International Peace Research Institute (SIPRI).

Korea’s share of the global arms market rose to 2.8% in the recent five-year period, as it emerged as the world’s eighth-largest weapons exporting country. Korea held a 1% share in the 2012-2016 period.

The Philippines was the biggest buyer of Korean weapons, accounting for 16% of Korea’s total weaponry exports, followed by Indonesia (14%) and the UK (14%). Warfare vessels were Korea’s No. 1 arms export item with a 68% share, followed by artillery (19%) and warplanes, including trainer jets (12%).

Korean defense companies have witnessed strong sales growth.

Their combined sales stood at 15 trillion won ($11.4 billion) in 2020, up 6.2% from the previous year. Their operating profit increased 16.4% year-on-year to 567.5 billion won over the same period, the fastest growth since 2017.

The state-run bank said it expects Korea’s defense exports to reach $10 billion this year.

BIG DEAL IN THE MAKING

In another positive sign, a big export deal is in the works in Europe.

Local defense industry sources said last week that Korea Aerospace Industries Ltd. (KAI) and two other weapons makers – Hanwha Defense Co. and Hyundai Rotem Co. – are poised to clinch a combined 10 trillion won export deal with Poland later this month.

During last week’s Farnborough Airshow in Hampshire, England, Ahn Hyun-ho, chief executive of KAI, Korea’s sole military aircraft manufacturer, said the company is seeking to sell 1,000 units of the FA-50 light combat aircraft, worth 40 trillion won, over the next decade.

He said interest in Korea’s advanced weapons system has heightened in Europe since the outbreak of the Russia-Ukraine war.

The FA-50 is a variation of KAI's T-50 supersonic trainer jet, co-developed with Lockheed Martin Corp.

Korea’s defense ministry said last Tuesday it had successfully completed a test flight of the KF-21 Boramae, the country’s first locally developed supersonic fighter jet.

With further flight tests and technological advancements, Korea aims to become the world’s eighth country to develop a homegrown advanced supersonic fighter jet.

Within five years, Korea aims to become the world’s third-largest defense exporter.



Han-Shin Park at phs@hankyung.com

In-Soo Nam edited this article.

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Source: The Korea Economic Daily Global Edition (July 25, 2022)