South Korean defense industry giant Hanwha Aerospace has announced a major direct investment package of nearly EUR 100 million to support Estonia’s defense industry and technological independence.
According to the company, the goal is to strengthen Estonia’s technological sovereignty and establish a regional center for territorial defense systems in the country. Including associated economic impacts and joint research and development projects, the total value of the package is projected to reach up to EUR 260 million.
Just before the turn of the year, Estonia signed a contract worth nearly EUR 290 million with Hanwha Aerospace to purchase at least six Chunmoo multiple rocket launchers, along with three different types of rockets. Last year, Hanwha also delivered six new K9 Thunder self-propelled howitzers.
“One part of the agreement was that Hanwha would invest in Estonia’s defense industry. Now this is starting to translate into concrete bilateral agreements with Estonian companies,” the Defese Minister Hanno Pevkur said. “We have always said that when we talk about technology transfer in the defense industry, this is exactly what we want – not just a straightforward investment in existing technology, but also new knowledge and skills being brought here. Hanwha has been a very good partner for Estonia in this regard.”
The Defense Minister added that Hanwha was among the potential bidders for Estonia’s upcoming naval overhaul.
One of the central elements of Hanwha’s investment is a contribution of approximately EUR 25 million toward establishing a 40 mm ammunition production unit in Estonia. The factory is planned to operate in cooperation with a local manufacturer and is expected to have a production capacity of more than 300,000 rounds per year.
Pevkur did not yet want to disclose where the ammunition factory would be built.
“Let’s allow all the agreements to be finalized first. As for possible locations, within the framework of the state’s special spatial plan we have identified four sites in Estonia where explosives-related defense industry could be located. These are near Tostamaa in Parnu County, near Piirsalu in Laane County and two locations in Ida-Viru County. Most likely it will be at one of these four, but if Hanwha prefers another location for logistical or other reasons, we are open to that as well. The aim is to get the factory producing as quickly as possible,” the minister said.
In addition to ammunition production, Hanwha Aerospace will invest approximately EUR 23 million in establishing a dedicated competence center in Estonia. The center is designed to provide independent maintenance, repair and overhaul (MRO) capabilities, meaning Estonia will be able to service and repair its Chunmoo and K9 systems and in the future possibly IFVs on location.
Estonian companies that are already working with or will soon sign cooperation agreements with Hanwha Aerospace include Nortal, Sensus Q, Frankenburg Technologies, Marduk Technologies and Milrem. (ERR)