Hanwha Group is investing 3 trillion won ($2.2 billion) to build an advanced ammunition production base in the United States, expanding across the world's largest defense market. As the group accelerates its local business from ammunition production and next-generation howitzer supply to a shipyard acquisition and medium unmanned surface vessel construction, Hanwha Group Chairman Seung-youn Kim visited the Gumi plant of Hanwha Systems, the strategic base of the group's defense business, to lend his support.
Hanwha Defense USA, the U.S. unit of Hanwha Aerospace, held an office opening ceremony on the 21st at Pine Bluff Arsenal, a U.S. Army installation in Arkansas, and said it would invest $2.2 billion over the next seven years to build an advanced ammunition manufacturing complex. Hanwha will construct facilities on the site to produce 155mm artillery shell components and propellant charges. By building an integrated manufacturing system that vertically integrates the entire ammunition production process from raw materials to finished products, the project is expected to expand U.S. ammunition production capacity and help modernize the aging local ammunition industry. Hanwha said the investment would create more than 400 local jobs.
The ammunition base in the United States is expected to generate synergy with the foothold Hanwha has steadily built in the local defense market. Last month, Hanwha Defense USA signed a contract with the U.S. Army worth up to $262.9 million (about 371.5 billion won) to supply prototypes of the K9MH wheeled self-propelled howitzer under the Mobile Tactical Cannon program. It marks the first time a completed Korean weapons system has entered a U.S. Army artillery modernization program, and the project could grow to about 10 trillion won if it proceeds to mass production.
In the maritime sector, orders have followed one after another since Hanwha Ocean and Hanwha Systems acquired Philly Shipyard in Philadelphia, Pennsylvania, for $100 million (about 139 billion won) in 2024, including selection as the builder of two missile test instrumentation ships for the Missile Defense Agency. Hanwha Defense USA also plans to begin construction this month on a medium unmanned surface vessel being developed in cooperation with Magnet Defense, a U.S. maritime autonomous navigation startup, and to start sea trials in January next year. The two companies are targeting an order under the U.S. Navy's MUSV program.
The group has also reorganized the command structure of its local defense business. Hanwha Systems recently disclosed that it would sell its entire 60% stake in Philly Shipyard to Hanwha Defense USA Shipbuilding LLC, funded by Hanwha Defense USA and Hanwha Future Proof, the group's North American investment platform. The move expands the role of Hanwha Defense USA, previously centered on land weapons, into naval defense and raises its standing as a comprehensive defense contractor in the United States.
With Hanwha's U.S. defense strategy on track, Chairman Seung-youn Kim visited the Gumi plant of Hanwha Systems, a linchpin of Korean defense exports, on the 22nd. It was his first site visit in about eight months, following a trip to the Jeju Special Self-Governing Province space center early this year.
The Gumi plant is a forward base that develops and produces core equipment including the multifunction radar for the Cheongung-II medium-range surface-to-air missile system. Kim toured the manufacturing building, closely reviewing the assembly and testing of the Cheongung-II radar, and inspected future battlefield technologies such as an artificial intelligence-based integrated air defense system. In the guest book, he wrote: "The starting point of AI innovation in Korean defense — Hanwha Systems is building the future of Korea's self-reliant defense."
Over lunch with employees, Kim said the Gumi plant "is both an export forward base for Hanwha's defense business as it reaches out to global markets and a hub of technological innovation." He added that "what you are making is the force that connects and moves all of Hanwha's defense capabilities, and the foundation that underpins the security of the Republic of Korea."
"Hanwha Systems, which links the core land, sea, air and space assets built by Hanwha Aerospace and Hanwha Ocean through an AI command-and-control system, is the brain and nervous system of Hanwha's defense business," Kim said. "I hope you will build unmatched defense AI capabilities that no one else can replace." He also said that "great achievements start with safety," calling for careful attention to the safety of employees, colleagues and partner companies.
Hanwha Vice Chairman Kim Dong-kwan and Hanwha Systems Chief Executive Yang Ki-won accompanied Kim on the visit. Analysts said the chairman's choice of Gumi, a center of defense manufacturing and technology, in the second half of the year, after visiting the outpost of the private space industry early in the year, signals his trust in and support for the defense and space portfolio led by the vice chairman.
