South Korean defense manufacturer Hanwha Aerospace is accelerating its push to localize production in Europe by establishing manufacturing operations in Eastern Europe. In Poland, the company is setting up a joint venture to produce guided missiles for the Chunmoo multiple rocket launcher system, while in Romania, it is launching a workforce training initiative to support local production of K9 self-propelled howitzers. The moves are part of a broader strategy to counter the European defense sector’s growing trend of excluding non-European manufacturers.
According to South Korea’s defense industry on Apr. 22, Hanwha Aerospace recently signed a term sheet with Polish defense group WB Group to establish a joint venture. Under the agreement, Hanwha Aerospace will hold a 51 percent stake, while WB Electronics, a subsidiary of WB Group, will own the remaining 49 percent.
The new entity will oversee local production of CGR-80 guided missiles for the Polish military and is also expected to function as a regional export base for the European market. The joint venture is scheduled to be finalized within the year, with construction of the production facility slated to begin in 2025.
Since 2022, Hanwha Aerospace has signed two contracts with the Polish Armament Agency worth a combined 7.2 trillion won ($5 billion) to supply CGR-80 and CTM-290 guided missiles. Until now, the missiles have been manufactured entirely in South Korea, but the completion of the Polish plant will enable local production of the 80-kilometer-range variant.
Poland’s Minister of National Defense Władysław Kosiniak-Kamysz referenced the joint venture on Apr. 15 in a post on X, formerly Twitter, stating, “Thanks to the transfer of technology to our industry, the new missile will also be used in other missile systems operated by the Polish military.”
Hanwha Aerospace also plans to build a manufacturing plant in Romania to produce the K9 howitzer and the K10 ammunition resupply vehicle. The company has secured a site for the facility and expects to break ground later this year, with production targeted to begin in 2027. In July 2024, Hanwha Aerospace signed a 1.4 trillion won ($980 million) contract with Romania to deliver 54 K9 howitzers and 36 K10 vehicles.
To support the localization effort, Hanwha is investing in workforce development. It recently signed a memorandum of understanding with the Polytechnic University of Bucharest and Pusan National University to collaborate on talent recruitment, scholarship programs, and the establishment of R&D centers on campus.
A Hanwha Aerospace official said that initial batches of the K9 will be produced in South Korea and delivered to Romania, while subsequent units will be assembled locally.
Hanwha Aerospace’s expansion in Europe comes amid growing protectionism within the European Union defense market. The bloc has increasingly signaled a preference for domestically produced weapon systems and has sought to limit access to non-EU and non-NATO suppliers.
Last month, the European Commission unveiled the “Readiness 2030” program, a five-year rearmament initiative aimed at boosting weapons procurement with an investment of 800 billion euros (approximately $1.3 trillion) by 2030. The program strongly encourages purchases of Europe-made defense products. On Mar. 19, European Commission President Ursula von der Leyen stated, “We must buy more European to strengthen the European defense technological and industrial base.”
To qualify for procurement under the program, weapons must be manufactured within Europe.
At an Apr. 8 investor briefing on how Hanwha Aerospace plans to allocate proceeds from a 3.6 trillion won ($2.5 billion) rights offering, Ahn Byung-chul, president of the company’s Strategy Division, underscored the urgency of localizing production. “The EU will do everything it can to prevent Korea from taking its market,” Ahn said. “For us, that’s a threat—but localization is the only way to overcome it.”
