Hanwha Systems announces $867M deal for radars for Saudi Arabia's Cheongung-II order

Industry

Published: 09 Jul. 2024, 18:24 Updated: 09 Jul. 2024, 18:24

Hanwha Systems announces $867M deal for radars for Saudi Arabia's Cheongung-II order

Hanwha Systems' multi-function radar (MFR) tailored for exports [HANWHA SYSTEMS]

Hanwha Systems announced Tuesday that it secured an $867 million contract to provide Saudi Arabia with radars for its mid-range missile defense system, known as Cheongung-II.

The deal signed with local defense company LIG-Nex1, the manufacturer of the system, is a part of the $3.2 billion order announced in February of 10 Cheongung-II to be exported to the Middle Eastern country.

It marks the company’s second overseas export of the radar system after sealing a deal with the United Arab Emirates in 2022.

Hanwha's multi-function radar plays an integral role in intercepting enemy aircraft and ballistic missiles both from the ground and in the air.

"Radar is a core component that accounts for 30 to 35 percent of the total weapons system budget and more than 70 percent of the maintenance, repair and overhaul business," said Park Hyuk, head of the Surveillance & Reconnaissance Business Division, adding that the communications company aims to develop its active electronically scanned array (AESA) radar into a multimission radar capable of responding to air threats.

The Cheongung-II is a domestically developed medium-range surface-to-air missile system designed to intercept ballistic missiles at an altitude of 15 to 40 kilometers (9.3 to 24.9 miles).

Following the announcement in an electronic disclosure and press release, shares of Hanwha Systems jumped by 4.37 percent on Tuesday to close at 19,120 won ($13.8).

Celebrating the contract, the head of the company vowed to expand lineups for arms exports.

"Hanwha Systems is opening a new chapter in the history of K-defense exports by supplying state-of-the-art radars that represent Korea's weapons system excellence to Saudi Arabia after the UAE," said Hanwha Systems CEO Eoh Sung-chul in a statement released Tuesday.

"We will continue to build a stronger presence in the global defense market by expanding our export items to include future weapons systems with new technologies such as lightweight AESA radars and unmanned naval systems for customers in various regions such as the Middle East, Europe and Southeast Asia."

The $3.2 billion contract was signed between LIG-Nex1, the system’s manufacturer, and the Saudi Arabian Defense Ministry in November, but had been kept confidential under the terms of the agreement.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]