The European Union (EU) is promoting military buildup, and European countries are accelerating their ammunition production and stockpiling. European nations are focusing on reducing their reliance on ammunition imports and enhancing their domestic production capabilities. The local defense industry is pursuing plans to produce ammunition, previously exported alongside K2 tanks, K9 self-propelled howitzers, and Cheonmu multiple launch rocket systems, within Europe due to the exclusionary moves by European offshore corporations.
According to the defense industry on the 24th, the EU is implementing a target to increase the annual production capacity of the 155mm artillery shells, which align with the North Atlantic Treaty Organization (NATO) standards, to 2 million rounds by the end of this year under the Ammunition Production Support Act (ASAP). Last year, it allocated 500 million euros (approximately 780 billion won) as a budget to expand regional ammunition production. This increase is due to the depletion of stockpiles from support for the Ukraine war.
The EU increased its production capacity of artillery shells from approximately 300,000 rounds per year before the war to 1.55 million rounds by January last year, but deemed it insufficient. It believes that a minimum annual production capacity of 2 million rounds is necessary to secure Ukraine support quantities and individual stockpiles of member states.
European countries are starting their own ammunition production. In February, Denmark reopened a closed ammunition factory on the Jutland Peninsula. Norwegian defense corporation Nammo is expected to produce ammunition and grenades for the Danish military at this facility. The United Kingdom, which is not an EU member, is also enhancing its production capacity for 155mm artillery shells. British defense corporation BAE Systems announced last month that it would increase its production of 155mm shells by 16 times and unveiled new manufacturing technologies that could reduce reliance on rare materials like nitrocellulose and nitroglycerin. It plans to directly produce RDX explosive, necessary for manufacturing 155mm shells, at a new facility in South Wales.
The local defense industry is pushing for local production in response to the EU's purchasing policy for European defense products. If they only export without local production facilities, they risk losing the market.
Hanwha Aerospace plans to initially establish a base in Poland to produce guided missiles locally and export them to the European market. Hanwha Aerospace decided last month to establish a joint venture with the Polish WB Group for the local production of Cheonmu multiple launch rocket guided missiles. The joint venture establishment process is expected to be completed in the second half of this year. Through this joint venture, Hanwha Aerospace plans to produce the 80km range Cheonmu guided missile (CGR-080) locally and export it to other European countries.
Hanwha Aerospace is also pursuing plans to secure artillery shell production facilities in Europe. No country has been designated for the artillery production plant yet. A Hanwha Aerospace official said, "We are considering various possibilities regarding which country to place the shell production facility."
The Polish government is reaching out to foreign entities to expand its ammunition production capacity. Its goal is to produce various ammunition, including 155mm shells, through joint ventures and to secure production technology through technology transfer. Approximately six corporations from South Korea, Germany, Turkey, and France have submitted letters of intent, and Hanwha Aerospace has reportedly been prioritized among them.
Previously, the Polish government allocated a budget of $75 million (approximately 1 trillion won) to the state-owned defense corporation Polish Armaments Group (PGZ) for ammunition production expansion. PGZ aims to increase its annual production capacity of 155mm shells to 150,000 rounds within 2 to 3 years.
Poongsan is also reportedly weighing the establishment of local production facilities in Europe. Poongsan anticipates that its production capacity will double once the expansion of domestic 155mm shell facilities is completed in the second half of the year. It is also considering establishing joint ventures in Poland and other countries to set up local production bases as demand for overseas shells continues.
Poland ranked first in Korean ammunition imports last year, surpassing the United States. Poongsan exported ammunition to Poland last year under contracts made with Hyundai Rotem and Hanwha Aerospace. Amidst the defense boom, the performance of Poongsan's subsidiary Poongsan FNS, which produces fuses (detonators) and sensors for guided munitions, significantly improved.