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S. Korean defense industry set to boost exports

All Headlines 11:40 September 12, 2012

By Nam Kwang-sik

SEOUL, Sept. 12 (Yonhap) -- South Korea's defense industry has grown at a rapid pace in recent years, raising hopes that it could help expand the country's exports, the head of the state-run arms procurement agency said Wednesday.

"The rapidly growing global weapons market may be a boon for exports of local companies holding high-end defense technologies," said Noh Dae-lae, the chief of the Defense Acquisition Program Administration (DAPA), in a meeting with business leaders, adding the market expanded annually about 10 percent between 2006 and 2009.

South Korea's defense exports amounted to US$1.5 billion in the first half of the year after reaching $2.4 billion in 2011, well above its target of $1.6 billion, he said.

Between 2006 and 2011, South Korea's weapons exports reached an average of $1.15 billion per year, with imports averaging $2.56 billion.

"In order to expand exports of defense equipment, South Korea should ramp up efforts to localize major weapons its military needs," Noh said.

The country's demand for military weapons amounts to an estimated 10 trillion won ($8.9 billion) a year due to its decades-old confrontation with North Korea and infrastructure favorable to the defense industry.

South Korea, which fought an internecine war with the communist North in 1950-53, is pushing for a program to replace its old military weapons that were introduced in 1974.

On Monday, the DAPA approved a 61.4 trillion won budget for the 2013-2017 defense plan that focuses on bolstering the nation's missile system. South Korea spent $8.5 billion on the procurement of defense equipment in 2011.

Currently, 95 companies, including Samsung Techwin Co. and Hanwha Corp., engage in the defense business in South Korea, with their combined sales rising to 9.3 trillion won in 2010 from 5.4 trillion in 2006.


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