Defense industry | Hanwha ammunition, Made in Germany

Photo: Imago/NTB Han Seong-sook seemed to want to make something clear when she spoke to an international audience at the beginning of the week: All the military equipment that was recently exported to various countries was not for war, but for peace. Her home country South Korea is a large arms producer, but primarily wants to use this industry to ensure global prosperity. Destruction, the Prime Minister emphasized, plays no role here.

The assurances were well calculated: Han met her during the Seoul Defense Dialogue, an annual event since 2012 that South Korea uses to position itself on the arms export market. This time too, several deals were made or finalized: Croatia is buying “Chunmoo” rocket launchers from the largest arms company Hanwha Aerospace, and the Philippines wants to modernize its military with South Korea.

For several years now, South Korea has been pursuing the ambitious goal of becoming one of the world's four largest arms exporters. Even under the current liberal President Lee Jae-myung, state representatives are promoting national producers under the banner “K-Defense,” virtually in line with K-Pop or K-Beauty. And with success: Over the past few years, Poland, which sees itself under acute threat since Russia's attack on Ukraine from 2022, has been supplying itself with self-propelled howitzers from South Korea. The United Arab Emirates is also requesting equipment from the East Asian country. This week, deeper cooperation with the Czech Republic was initiated.

The latest figures from the Stockholm peace research institute Sipri place South Korea in ninth place in the ranking of the largest export nations in the arms business for the period 2021 to 2025. However, a recent count by the "Seoul Economic Daily" came to the conclusion that South Korea is in fourth place in the world with arms exports of around 15.4 billion US dollars - behind the USA, France and Israel and just ahead of Germany. The Federal Republic, in turn, is trying to achieve more exchanges with South Korea, which has been considered a NATO-equal state since 2023, which makes trade in arms equipment easier. Some cooperation projects, for example in the development of guided missiles, have been decided. A major investment of a new dimension is currently underway: The Hanwha Group is planning an ammunition plant in Germany.

The group - according to Sipri it was the 21st largest arms exporter in the world in 2024 with exports of 7.79 billion US dollars - wants to invest in Germany in the long term. “We have to face the fact that the call for resilient supply chains is growing in Europe,” said Thorsten Kutz, head of the newly founded German subsidiary, in an interview. "This means that it is preferred if production takes place in Germany or Europe."

The group is currently looking for a suitable location in Germany, which would be the third in Europe after Poland and Romania.

The group is currently looking for a suitable location in Germany, which would be the third in Europe after Poland and Romania - where construction is currently underway. According to Kutz, discussions are taking place with several federal states. The criteria include “safety distances” and funding, but also the “availability of jobs, access to training, perhaps also the proximity to production facilities that we are setting up in Eastern Europe to create synergies.”

These criteria allow for some assumptions, which Hanwha neither wants to confirm nor deny: The availability of jobs and infrastructure seems to be high in the future where companies like VW are likely to close factories, for example in Saxony or Lower Saxony. The geographical proximity to Eastern Europe would speak for an East German federal state. Factors such as “political stability” are also taken into account, says Kutz.

Hanwha expects that the plant, in which a “high three-digit million amount” in euros would be invested, would create around 200 to 300 jobs. Production should start around 18 months after the contract is signed. The factory in Germany could become a kind of hub for the supply chain in Europe, where demand for defense equipment is increasing beyond German borders. What exactly is to be produced is still unclear; This also depends on orders elsewhere in Europe, they say.

The company's portfolio includes everything from ammunition transporters to armored personnel carriers and self-propelled howitzers. A selling point of South Korean manufacturers is that their country has been formally at war since the Korean War - which only ended with an armistice in 1953 - and is therefore used to rapid production processes. Thanks to high scaling, this also creates cheaper prices.

South Korea's arms export boom also has its limits. As things currently stand, the arms industry only replenishes European warehouses, but does not deliver to Ukraine. Anything else would be “a big mistake,” Russian President Vladimir Putin warned. South Korean President Lee, who wants to maintain contact with Moscow in order to possibly find an exchange with the enemy North Korea again, does not want to risk this. According to South Korea, arms exports are supposed to be about peace.

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