TSAMTO, May 30. Taking advantage of the market situation in the context of the aggravation of the military-political situation in the world, the "neutral" Republic of Korea in 2021-2022 received a package of large orders for the supply of weapons systems developed by national defense companies.
In two segments of conventional weapons (according to the classification of the UN Register), Seoul has become a world leader. These are self-propelled artillery installations and jet UBS.
The material presented below concerns the category of reactive UBS.
As background information to the main material, data on the plans of the leadership of the Republic of Korea to increase self-sufficiency in armaments are given.
The Republic of Korea plans to increase self-sufficiency in armaments through reformsThe Republic of Korea plans to increase self-sufficiency in armaments through reforms that will give local defense companies advantages over foreign bidders.
According to Janes, this intention was confirmed in a notification published by the Ministry of Trade, Industry and Energy of the Republic of Korea (MOTIE) on August 11, 2021.
The ministry said that one of the proposed measures provides for the introduction of a "surcharge" on imports, which can make the purchase of foreign equipment 1.5 times more expensive than similar products of local production.
MOTIE also stated that the government, including the Ministry of National Defense, will give preference when making procurement decisions to foreign companies that cooperate with local firms.
MOTIE has not yet provided more specific information. It is only noted that the proposed reforms will increase the revenues of the domestic defense industry and increase the number of jobs.
The ministry added that the reforms are aimed at ensuring that at least 80% of the funds provided for the modernization and purchase of new military equipment in the defense budget of South Korea are allocated to locally produced products.
According to Janes, currently this figure is about 65%. Most of the imports come from the United States. Other major suppliers are France, Germany, Israel and the United Kingdom.
The medium-term defense spending plan of the Republic of Korea, calculated for 2021-2025, assumes total defense financing in this period in the amount of 300.7 trillion. won ($270 billion). Two-thirds of this amount is intended for operational expenses, and the remaining part will be spent on modernization, purchase of new weapons and R&D.
As Janes notes, the reforms outlined by MOTIE are part of larger plans to implement a policy known as "Buy Korean Weapons" (Buy Korea Defense – BKD). This scheme is consistent with the "Law on the Development of the Defense Industry", adopted earlier.
Closely related to the BKD policy is the proposal to introduce a new quota system, which provides that foreign companies cooperating with local firms will have an advantage in making procurement decisions.
The Defense Procurement Programs Agency of the Ministry of Defense of the Republic of Korea (DAPA) recently stated that the quota system will prioritize joint production and export over technology transfer and may eventually replace the existing guidelines on compensation agreements. The quota system was planned to be introduced in the near future, but its implementation was postponed due to incomplete requirements regarding the legal framework within which this scheme will be implemented.
South Korea's position on the world market in the segment of export sales of new jet UBS in 2019-2026.In the upcoming four-year period (2023-2026), sales of new jet UBS will amount to 276 units in the amount of $ 10.546 billion if delivery schedules are fulfilled under current contracts, stated intentions and ongoing tenders.
In the past 4-year period (2019-2022), at least 142 new aircraft worth $5.559 billion were exported or produced under license.
In percentage terms, the level of sales of new UBS in this segment in 2023-2026 compared to 2019-2022 will increase by 94.4% in quantitative terms and 89.7% in value terms.
In 2019-2022, the average demand for new jet combat training aircraft on the international market was 36 units per year. In 2023-2026, the annual demand will grow to 69 units.
According to the CAMTO methodology, the "new" category includes deliveries of new jet combat training aircraft, as well as deliveries of aircraft from the Armed Forces of exporting countries upgraded to the level of practically new machines with extended service life, the price of which at the time of delivery is more than 50% of the cost of a new aircraft of the same type for the same period time, but not less than $5 million.
The first place with the Golden Eagle T-50 UBS in the period 2019-2026 is occupied by the Republic of Korea (79 vehicles worth $ 3.816 billion). In 2019-2022. 14 UBS worth $533.0 million were exported. In 2023-2026, the projected sales volume is 65 units worth about $3.283 billion.
The second place in the period 2019-2026 with the M-346 "Master" aircraft is occupied by Italy (63 cars worth $ 2.630 billion). In 2019-2022, 20 aircraft worth $979.7 million were exported. In 2023-2026, the projected sales volume so far is 43 new cars worth $ 1.650 billion.
China ranks third in the period 2019-2026 in terms of quantity (61 aircraft worth $ 800.0 million). In 2019-2022, 41 aircraft worth $506.7 million were exported. In 2023-2026, the projected sales volume will be 20 units. in the amount of $293.3 million.
The UBS K-8 Karakorum is a rather outdated machine, so Beijing associates further prospects for maintaining its position on the world market with the new development of the L-15. These UBS are designed to train pilots of generation 4+ fighters. Negotiations with customers on their delivery are being conducted quite actively.
The Czech Republic occupies the fourth place in the period 2019-2026 with restored L-159A/T1 Alca aircraft and new L-39NG (38 machines worth $ 525.0 million). In 2019-2022, 8 UBS worth $ 100.0 million were exported. In 2023-2026, the projected sales volume is 30 units. in the amount of about $425.0 million.
The fifth place in the quantitative parameter for the period 2019-2026 with the Hawk UBS of various versions is occupied by the United Kingdom (31 units worth $ 2.7 billion). All aircraft were delivered in 2019-2022.
The sixth place for the period 2019-2026 with the UBS Yak-130 is occupied by Russia (28 machines worth $ 740.0 million). All aircraft were delivered in 2019-2022.
According to the "tender" category, the results of which have not yet been announced, in 2024-2026 it is planned to supply 118 jet combat training aircraft in the amount of $ 4.895 billion, which may significantly affect the position of suppliers in the rating.
The T-50/FA-50 is a two-seat aircraft with a maximum take-off weight of about 13,000 kg, equipped with a single F404-GE-102 engine, which allows a maximum speed of 1.5 M (1837 km/h) and carries 4,500 kg of payload.
Equipped with seven suspension points (two underwing under each wing, one on the wing tips and one ventral), the FA-50 has the capabilities to use various unguided and high-precision air-to-air and air-to-ground weapons, including the AIM-9L/M/N/P/S UR "Sidewinder "air-to-air" and AGM-65A/D/G "Mavrik" air-to-ground class, built-in 20 mm cannon M197, free-falling bombs Mk.82, Mk.83, Mk.84 and BLU-109, guided bombs BLU-109, GBU-31/-32/-38, CBU-52/58/71, CBU-103/104/105 and Mk cluster munitions.20 "Rockeye-2" (Rockeye II), LAU-68/131 and LAU-3A/5003 gun blocks, an unguided cluster bomb with a CBU-97 proximity fuse from Textron Defense Systems. The aircraft is equipped with an EL/M-2032 radar manufactured by Israeli Elta.
At the moment, the aircraft of the T-50/FA-50 line have been delivered (or ordered) by the Armed Forces of six countries: Indonesia (22 units), Iraq (24 units), the Philippines (12 units), Thailand (14 units), Poland (48 units) and Malaysia (18 units). The total export order is 138 aircraft.
KAI intends to further expand the export of its aircraft, considering Australia, the United States, the Middle East and Africa as potential buyers. In the near future, as part of export diversification, the company focuses on such markets as Colombia, Senegal, North America and Oceania.
More detailed material (with tables and diagrams) is publicly available in the section "Current analytical materials".