Hanwha Aerospace is accelerating its localization strategy in Europe through the establishment of production facilities in Eastern Europe. In Poland, a joint venture has been set up for local production of guided missiles for the multiple launch rocket system, Chunmoo, while in Romania, efforts are underway to train local personnel for the operation of a K9 self-propelled howitzer production plant. This comes in response to the defense block that excludes offshore companies in Europe, which is a key export region for domestic defense corporations.
According to the defense industry on the 22nd, Hanwha Aerospace recently signed a term sheet contract for the establishment of a joint venture with the Polish defense corporation WB Group. Hanwha Aerospace plans to hold a 51% stake while WB Electronics, a subsidiary of WB Group, will hold 49%.
The joint venture will be responsible for the local production of the Chunmoo guided missile (CGR-080) with a range of 80 km, which will also serve as a hub for exports to the European market. It is reported that the establishment of the joint venture will be completed within the year, with plans to start construction next year.
Hanwha Aerospace has entered into contracts worth 7.2 trillion won to export 80 km guided missiles and 290 km guided missiles (CTM-290) to the Polish Armaments Agency in two rounds since 2022. While the finished goods were exported from South Korea, the 80 km guided missiles are expected to be produced locally once the Polish factory is completed.
Poland's Minister of Defense, Mariusz Błaszczak, wrote on his X (formerly Twitter) account on the 15th regarding the establishment of the joint venture that "thanks to the technology transfer to our industry, the new missile will also be used in other missile systems used by the Polish military."
Hanwha Aerospace will also build a factory in Romania to produce K9 self-propelled howitzers and K10 ammunition supply vehicles. The site selection for the factory has been completed, and construction is set to begin within the year, with production expected to start in 2027. Last July, Hanwha Aerospace signed a supply contract worth 1.4 trillion won with Romania for 54 K9 self-propelled howitzers and 36 K10 ammunition supply vehicles.
Efforts are also being made to secure personnel for the operation of local production facilities. Hanwha Aerospace recently signed a memorandum of understanding (MOU) to cooperate with Bucharest University of Economic Studies and Pusan National University on local personnel recruitment, academic scholarship support, and the establishment of a research and development center at the university.
A representative from Hanwha Aerospace noted, "Some of the initial K9 quantities will be produced in Korea and supplied to Romania, while the rest will be produced in Romania."
Hanwha's establishment of production bases in Europe is due to the European Union (EU) blocking the entry of defense markets from non-European, non-EU, and non-NATO countries.
The European Commission last month announced the Readiness 2030 program, a European rearmament plan that emphasizes increased purchases of European-made weapons with an investment of €800 billion (about 1,300 trillion won) over the next five years by 2030. Ursula von der Leyen, President of the European Commission, noted during the announcement on the 19th that "to strengthen Europe’s defense technology and industrial base, we need to buy more European-made products." The EU also stipulated that to sell weapons, production must occur locally.
An Byeong-cheol, CEO of Hanwha Aerospace, mentioned the necessity of investment in Europe during a briefing on the usage of funds from a capital increase worth 3.6 trillion won on the 8th, stating, "It is a crisis for us that the EU will do its utmost to prevent South Korea from taking market share, and the only way to overcome this is through localization."