Hanwha Aerospace Co. has won a $2.4 billion armored vehicle supply deal to Australia, adding to expectations that the South Korean defense industry will contribute to the long-term growth of Asia’s fourth-largest economy.
Australia and Hanwha Aerospace said on Friday that the Albanese Government has signed with Hanwha Defense Australia PTY Ltd. to deliver and support 129 locally built Redback infantry fighting vehicles for the country’s army. The Albanese government is the federal executive government of Australia.
Hanwha Aerospace, the subsidiary of South Korea’s chemicals-to-defense conglomerate Hanwha Group, said that many other countries are also showing interest in the Redback as the armored vehicle meets the demand of the Australian Army, which requires the world’s top military technology and performance.
“We will do our utmost to develop the defense industry into South Korea’s next-generation growth engine by combining the country’s defense parts ecosystem, top-notch production capacity and advanced technology,” Hanwha Aerospace CEO Son Jae-Il said in a statement.
The defense sector has been enjoying booming demand from countries across the world, offsetting an economic downturn amid sluggish semiconductor exports.
The total value of the Australian new troop carrier project is approximately A$7 billion ($4.6 billion), the single largest investment in army capabilities to date, according to the country’s defense ministry. The combined value of the acquisition and initial support contracts is approximately A$4.5 billion, the ministry said.
The proposed deal had been originally valued at A$10 billion for 450 armored vehicles but the government reduced it in April to a project for 129 units after a strategic review.
MADE IN AUSTRALIA
The armored vehicle, named after the Australian redback spider, will be manufactured at a factory under construction by Hanwha Defense Australia, Hanwha Aerospace’s subsidiary, in Geelong, a city southwest of Melbourne, for deliveries from 2027 to late 2028.
“This is an important project for the Australian Army that will be delivered by highly skilled workers in Greater Geelong and other centres of Australian manufacturing,” said Deputy Prime Minister Richard Marles in a separate statement.
The project is expected to support approximately up to 2,100 jobs including 1,800 direct jobs, said the Australian Department of Defence citing independent analysis forecasts.
