STX, Defense Export of $130 Million to Peru... Expansion Across Latin America as 'K-Defense Vanguard'

[Financial News] The scale of defense exports that STX has made to Peru has reached approximately $130 million (about 180 billion KRW) on a cumulative basis. This was the secret to Korea being able to rank 'No. 1 in Peru's defense imports (market share of 33.9%)' before the pandemic (2014~2018). STX has succeeded in exporting not only to the navy but also to the army's armored vehicles, expanding its reach from maritime defense to land defense, establishing itself as a representative of K-Defense in Peru.


■'First Export of Domestic Combat Armored Vehicles to Latin America'
According to industry sources on the 14th, STX signed a contract with the Peruvian Navy in 2013 to build 500t-class patrol boats. By 2023, it delivered a total of 8 ships, recording cumulative defense exports of approximately $130 million (about 180 billion KRW). In April 2024, it was selected as the preferred negotiator for the Peruvian Army's wheeled armored vehicle project. It plans to supply 30 Hyundai Rotem K808 armored vehicles (worth $60 million). This is the first case of domestic combat armored vehicles being exported to Latin America. Securing a direct contract base through local assembly was effective. It is evaluated as a strategic model of Hallyu-style defense. It is the result of blood and sweat over the past 10 years.
In May last year, STX signed a strategic partnership with the Peruvian Army's state-owned defense company, FAME S.A.C., in the presence of the President of Peru. It is evaluated that it has established a strategic and long-term local business base through technology transfer and local assembly, not just supplying various defense and special vehicles such as armored vehicles, patrol cars, ambulances, and tactical vehicles.
STX is further collaborating with the Peruvian Army's arsenal to contribute to the development of Peru's defense and manufacturing industries. It plans to complete a special vehicle assembly plant capable of producing patrol cars and ambulances within the FAME site by the end of this month. It is expected to contribute to the development of Peru's defense and automotive industries by gradually expanding technology transfer and facility investment related to assembly and production in Peru.
STX confirmed the supply of 30 armored vehicles as the first implementation contract following the partnership with FAME. It is expected that follow-up orders for patrol cars, ambulances, and various special vehicles will continue.
A defense industry official said, "This Hallyu-style defense business model is evaluated as having a three-pronged strategy of local economic participation, technology transfer, and Korean-style quality standards," adding, "The STX-FAME defense business model is also being evaluated as the standard for the modernization of the Peruvian military."


■From Peru to All of Latin America… Expansion of 'New Continent K-Defense'
STX is establishing the K-Defense brand across Latin America based on its achievements in Peru. The size of the Latin American defense market is expected to exceed $1.85 billion by 2025. Major countries in Latin America, such as Ecuador, Paraguay, Honduras, and Colombia, are the primary targets. Based on its experience in local assembly production (KD), it is exploring the possibility of defense cooperation tailored to each country, expanding its diplomatic and business base. STX already has a history of delivering CPV patrol boats to Colombia.
Recently, STX expanded its defense diplomacy channels with Honduras and Ecuador. Based on the frame agreement signed with FAME, it is promoting and reviewing the export of a cooperation model based on assembly line collaboration with state-owned defense organizations in each country.
Currently, STX uses its branch in Lima, Peru, as a strategic base. The main export items are diverse, including armored vehicles, various tactical vehicles, bulletproof vehicles, transport vehicles, ocean survey ships, and ambulances. The local assembly and delivery model utilizing the production system with FAME is emerging as a strength.
An STX official said, "STX aims for a system-type defense entry at the national level, not just simple delivery," adding, "A virtuous cycle structure that extends to resource linkage related to secondary batteries such as lithium and nickel, KD business, technology transfer based on strategic partnerships, and contracts considering a long-term perspective is the core of the STX defense business model."
ggg@fnnews.com Kang Gugu Kim Kyung-a Reporter