Time is ripe for Korea to sell Saudi Arabia more weapons

Defense

Published: 16 Nov. 2022, 18:39 Updated: 16 Nov. 2022, 19:19

Time is ripe for Korea to sell Saudi Arabia more weapons

A Korean-made Cheongung II mid-range surface-to-air missile system, manufactured by LIG Nex1 [YONHAP]

The visit of Saudi Arabia's Crown Prince Mohammed bin Salman is being closely watched for clues as to whether Riyadh and Seoul will negotiate new deals for Korean weapons, following up on contracts signed earlier this year.

The Middle Eastern kingdom, which is the world’s largest weapons purchaser, is said to have expressed interest in the past for advanced air defense systems from Korea, according to industry analysts.

According to domestic media reports, Hanwha Defense Co., an affiliate of Hanwha Group, is seeking to sell weapons such as Biho-II, an anti-aircraft defense system, to Saudi Arabia.

LIG Nex1 is also reportedly hoping to sell its Cheongung-II mid-range surface-to-air missile (SAM) system to Riyadh.

Hanwha Defense's K30 Biho twin 30 mm self-propelled anti-aircraft weapon system, mounted on an armored vehicle. [HANWHA DEFENSE]

Both companies declined to provide comment for this article, citing the sensitive nature of defense contract negotiations and the need for confidentiality.

The United Arab Emirates (UAE) signed a contract worth 4.29 trillion won ($3.2 billion) for the Cheongung-II system in January 2022, heightening expectations of Saudi's interest in the system.

The UAE deal was South Korea’s largest sale of a single weapon system for export.

Saudi Arabia is known to have previously approached Russia for its S-400 mobile surface-to-air missile defense system, but Riyadh said it was no longer considering that option last November.

Russian weapons exports to the kingdom appear even less likely in the wake of the war in Ukraine, with Moscow’s potential customers driven away over fears of being sanctioned.

Saudi Arabia was banned by the Biden administration from importing U.S. offensive weapons because of its involvement in the civil war in Yemen, so it is looking for imports of defense systems from other countries, including Korea, especially as it continues to face unmanned aerial system (drone) and missile attacks on its oil production facilities from Iran-backed Houthi rebels.

Korean defense companies could offer Riyadh attractive options with deals that entail localized production and maintenance support, which have frequently featured in Korean defense export contracts with other countries, such as Hanwha Defense’s $730 million deal to sell K-9 self-propelled howitzers to Australia, which will be manufactured at a facility in Geelong, Victoria.

Korea’s exports of weapons systems tripled to a record $7.3 billion last year from $2.6 billion in 2016, according to the Korean government, and are expected to exceed $10 billion this year, according to the Export-Import Bank of Korea.

Saudi Arabia signed contracts with three Korean defense companies collectively worth 3.71 billion Saudi riyal ($989 million) in March, but the details of those contracts have not been fully disclosed.

The Korean contracts were three out of 10 deals that the Saudi government signed with local and international companies at the World Defense Show (WDS) 2022 in Riyadh.

Hanwha’s contract, worth 3 billion riyals, entails company support for Saudi Arabia’s defense capabilities and supply chain services. Both sides declined to specify which weapons would be supported under the agreement, citing a confidentiality clause.

Under its 460 million riyal contract, Poongsan will supply various types of ammunition to the Saudi defense ministry.

LIG Nex1, another major Korean defense exporter, inked a 250 million riyal deal to supply electro-optical defense systems to the Royal Saudi Naval Forces.

With no end in sight for sanctions on Russia over its war in Ukraine, coupled with U.S. anger over Riyadh’s decision cut back on oil output in tandem with Moscow, demand for Korean weapons could rise in other countries, such as India, that have traditionally relied on Russian arms for their defense needs.

In recent years, Korea and Saudi Arabia have sought to enhance bilateral cooperation in defense and the arms industry.

Seoul and Riyadh held joint high-level defense cooperation meetings in 2019 and 2021, and Saudi Arabia’s Chief of the General Staff Gen. Fayyadh bin Hamed Al-Ruwaili Al-Ruwaili attended the Seoul International Aerospace & Defense Exhibition in October 2021.

Korea and Saudi Arabia also signed a pact in February 2013 to boost defense cooperation in a wide range of areas, including the arms industry, logistics support, military exercise and training.

The two countries signed an intelligence-sharing pact in September 2017, reflecting their growing ties and to counter defense cooperation between Pyongyang and Tehran, Riyadh’s traditional rival.

BY MICHAEL LEE [lee.junhyuk@joongang.co.kr]