S. Korea Targets Sales in Southeast Asia
By using the Southeast Asian market as a stepping stone, Seoul aims to double its arms exports to $4 billion by 2020.
Trainer jets are in the forefront of Seoul’s export push in Southeast Asia. In a recent development, South Korea and the Philippines have begun negotiations to export South Korea’s 12 FA-50 fighter aircraft to the Philippines. The FA-50 is a modified variant of the T-50 Golden Eagle supersonic trainer jet built by Korea Aerospace Industries (KAI).
“Both sides have entered final negotiations over the sale of the FA-50,” a spokesman for the Defense Acquisition Program Administration (DAPA) said. “The negotiations are expected to last for several months.”
The FA-50 is expected to reinforce the Philippine Air Force, as the island country has had no fighter jets since it retired the last of its U.S.-designed F-5 fighters in 2005.
The FA-50 procurement comes as the Philippines is in a territorial dispute with China in the South China Sea, but Philippine officials say the jet will be used primarily for training, interdiction and disaster response.
KAI has strengthened its foothold in Indonesia, which has emerged as one of the largest weapon trading partners of South Korea. Following the delivery of 16 KT-1 Woongbi basic trainers to Indonesia, KAI signed a $400 million contract with Indonesia in 2011 to sell 16 T-50s.
“We’re successfully expanding our partnership with Indonesia in terms of technology transfer as well as product sales,” said Park Noh-sun, KAI’s senior vice president of operations, referring to the Seoul-Jakarta project to develop an F-16-class fighter aircraft, known as KF-X.
“I think there are four needs that you have to satisfy in arms exports. They are political needs, operational needs, economical needs and the needs of technical transfer,” Park said. “For Southeast Asian nations, South Korean weapon systems meet all these needs perfectly.”
Thailand also is considered a potential customer of the Surion utility helicopter, jointly built by KAI and Eurocopter, as well as the T-50 jet, Park added.
On top of jet sales, South Korea is focusing on exporting submarines and ships. Daewoo Shipbuilding & Marine Engineering sold three of its 1,200-ton Type-209 submarines to Indonesia in 2011 for $1.1 billion.
Other Southeast Asian nations, including Malaysia and the Philippines, have a keen interest in South Korean naval ships, including support vessels, said Lee Jong-deuk, manager of the overseas marketing bureau at the Korea Defense Industry Association.
“South Korea’s shipbuilding capability was proven last year by winning a $940 million order to build four tankers to support the British Royal Navy,” Lee said. “The export of Navy tankers to the U.K. will help South Korean shipbuilders expand naval ship exports to Asia, Africa and British Commonwealth countries.”
Meanwhile, South Korea is trying to make inroads into South America.
KAI signed a $200 million contract with Peru to sell 20 KT-1 trainer aircraft, the country’s first aircraft sale to the South American market.
“The KT-1 export to Peru paved the way to enter into the South American market, following Southeast Asia and Europe,” DAPA Commissioner Noh Dae-rae said. “We expect Korean defense contractors will expand exports to the region slowly but surely on the springboard of this KT-1 sale.”
DAPA sees a market here for about 200 basic trainers.
LIG Nex1, a leading precision-guided weapon developer, inked a deal with Colombia last November to sell 16 ship-to-ship missiles for about $100 million.