Hanwha Aerospace Accelerates K239 Chunmoo’s Expansion in Europe... ‘Localization Strategy’ Emerges as Export Game Changer

[Financial News] Hanwha Aerospace’s K239 Chunmoo export contract with Croatia is being viewed as more than a simple arms deal. As demand for stronger defense capabilities surges among Eastern European NATO members following the war in Ukraine, the Korean defense industry’s strengths—long-range precision-strike capabilities and rapid delivery—are drawing renewed attention. In particular, the establishment of local production and supply chains centered in Poland is laying the groundwork for additional exports and securing a medium- to long-term growth catalyst.
According to Korea Investment & Securities on the 14th, Croatia will acquire 18 K239 Chunmoo launchers, ballistic missiles and ancillary equipment under a contract worth approximately €410 million, out of a total project cost of €435 million. Croatia already operates the U.S. High Mobility Artillery Rocket System (HIMARS), but chose the K239 Chunmoo as an additional system because the two platforms are based on markedly different operational concepts.
Korea Investment & Securities viewed the contract as a signal of Hanwha Aerospace’s transition in its business structure. The company is evolving from competing primarily on product performance and delivery schedules to building competitiveness through localization and a long-term supply base.
HIMARS is primarily configured around Guided Multiple Launch Rocket System (GMLRS) missiles with ranges of 70 kilometers or more. These are effective as tactical-level strike assets. By contrast, the K239 Chunmoo includes ballistic missiles with ranges exceeding 300 kilometers. They are optimized for strategic targets, particularly key infrastructure in the rear, such as command centers, communications facilities, airports and ports. As long-range precision strikes have emerged as a factor capable of determining the course of the war in Ukraine, Croatia needed a weapons system that could address HIMARS’s limitations.
Korea Investment & Securities said the true value of K239 Chunmoo exports lies in the localization base established in Poland. Hanwha Aerospace is already producing and supplying the ‘Homar-K’ in Poland, incorporating locally produced vehicles and command-and-control systems. It has also established a foundation for local production of CGR-080 guided missiles. Under the Croatian contract, Poland-based defense company WB Electronics will supply the command-and-control system and handle systems integration. The local partnership ecosystem built in Poland is expanding into projects in third countries.
Whether the guided missiles will be produced locally has not yet been determined. However, the trend of expanding the local cooperation base into intra-European supply is clear. As the number of K239 Chunmoo operators in Europe grows, Poland’s production base is likely to be used more extensively. This would lower barriers to winning additional orders and strengthen cost competitiveness.
Jang Nam-hyun, a researcher at Korea Investment & Securities, assessed, “K239 Chunmoo exports to Europe are evolving beyond short-term order growth into a business with long-term stability through a localization strategy.” He added, “This is part of the process through which South Korea’s defense industry is advancing from a focus on product competitiveness to becoming a comprehensive solution provider.” He continued, “The more Poland-based local production and supply chains are established, the more likely additional orders will be received.”
Meanwhile, Korea Investment & Securities maintained its ‘Buy’ rating and target price of 2 million won on the company.
[email protected] Kang Gu-gwi Reporter