S. Korea inks 2nd K2 tank export deal with Poland

Hyundai Rotem’s K2 Tank (Hyundai Rotem)

South Korea signed its second “large-scale” deal to export a second batch of K2 tanks to Poland, the state arms procurement agency said Wednesday, amid growing calls for the country to tap its military manufacturing firms to navigate new global security challenges.

“Polish Minister of National Defense Wladyslaw Kosiniak-Kamysz officially announced on July 2 that the negotiations for the second deal involving K2 tanks with Hyundai Rotem were finalized and set to be signed,” Seoul’s Defense Acquisition Program Administration said in a statement.

The deal marks the country’s “first large-scale arms export” after the launch of the Lee Jae Myung government in early June, DAPA noted.

DAPA said the size and details of the deal would remain classified until a later time, but Seoul officials, declining to be named, said in June that the contract is expected to be worth around $6 billion. If confirmed, the figure would mark Seoul’s biggest single arms export contract.

The sources added that Poland will receive 180 K2 tanks under the new deal. Some 117 units would be manufactured by Korean defense contractor Hyundai Rotem, and the remaining would be produced by Poland’s state-owned Polish Armaments Group.

Seoul and Warsaw are currently negotiating the details of the signing ceremony, including its date and venue, according to DAPA.

DAPA anticipates that the latest deal would allow Poland to receive some customized versions of K2 tanks “aligned with the demands of the Polish military,” with the new partnership between Hyundai Rotem and PAG. A manufacturing facility for K2 tanks will be established in Poland as well, increasing the chance for additional deals to be smoothly negotiated and inked.

The latest supply contract is part of a broader arms agreement reached between the two countries in 2022, which amounted to $13.7 billion and included a clause to supply 1,000 South Korean K2 tanks to Poland. Besides K2 tanks, Seoul agreed to supply the country with rocket launchers and fighter jets. The agreement came as Poland decided to increase its defense spending following Russia’s invasion of Ukraine in February that year.

Later in 2022, Hyundai Rotem signed a deal worth around $3.3 billion to supply Poland with the first batch of 180 K2 tanks.

The deal to supply the second batch was projected to be signed late last year, but was pushed back. Observers cited the political turmoil stemming from impeached President Yoon Suk Yeol’s failed Dec. 3 martial law bid as a major hurdle.

DAPA on Wednesday, however, pointed to issues related to the “expanded scope of the deal” compared to the first as a reason behind the delay.

“The deal was confirmed today as the negotiation period became prolonged due to the expanded scope of the deal and the scale of the project, by including plans involving the development of the Polish version of the K2 tanks and local manufacturing,” it explained.

In South Korea, there have been growing calls for the government to utilize its military manufacturing firms to navigate new security challenges and shifting demands posed by the NATO members’ recent decision to raise defense spending to 5 percent of gross domestic product.

“With NATO members now committed to raising defense spending to 5 percent of GDP, demand for advanced weapons systems and defense technology is set to rise sharply,” the Asan Institute for Policy Studies said in a Monday report.

“To fully capitalize on these opportunities, South Korea should treat defense industry cooperation not simply as a commercial venture but as a core pillar of its broader security and alliance strategy.”

DAPA, nodding toward such calls, said, “The latest deal is expected to be a fresh momentum for the country’s arms exports,” with countries in Europe and NATO members.

South Korean President Lee has picked the defense industry as one of the sectors that his administration plans to foster with expanded support. He aims to position his country among the world’s top four arms exporters.

In a phone call with United Arab Emirates President Mohamed bin Zayed Al Nahyan on Tuesday, Lee agreed to deepen bilateral cooperation in defense industries alongside advanced technologies and energy. The UAE, alongside Poland, is a major arms industry partner for South Korea.

Meanwhile, South Korea’s arms exports fell to $9.5 billion in 2024 after hitting a record high of $17.3 billion in 2022 and sliding to $13.5 billion in 2023.

mkjung@heraldcorp.com