The recent change of leadership in Poland will compel Seoul to engage freshly with the new administration to ensure the continuity of its defense exports to Poland. The political change in Poland casts a shadow on the continuity of a portion of defense orders. To mitigate risks that could arise from losing a significant portion of its Polish contracts, the South Korean government is anticipated to focus on diversifying its defense markets in Europe to mitigate the risk of volatility in the Polish market, according to GlobalData, a leading data and analytics company.

The framework agreement that was signed in 2022 under the previous Polish regime included the supply of as many as 1,000 K2 Black Panther Main Battle Tanks (MBT) along with 672 K9 Self-Propelled Howitzers (SPH). Apart from that, the agreement consists of the acquisition of 48 FA-50 light attack aircraft and 212 units of K239 Chunmoo MLRS systems coupled with 10,000 239 mm rockets from South Korea. The deal also includes a licensing agreement that will enable Poland to manufacture the K239 Chunmoo MLRS system, K2 Black Panther MBT, and Krab SPH domestically.

GlobalData’s latest report, “South Korea Defense Market Size and Trends, Budget Allocation, Regulations, Key Acquisitions, Competitive Landscape and Forecast, 2023-28,” reveals that the country’s own defense modernization efforts have spurred growth in defense research and development (R&D) initiatives and the development of advanced defense platforms. This has led to an increase in the competitiveness of South Korean defense companies and opened export opportunities.

Abhijit Apsingikar, Aerospace & Defense Analyst at GlobalData, comments:“Poland had previously overturned a deal with Airbus in 2016 after the Law and Justice Party (PiS) was elected to office. As such, the current change of leadership in Poland may have triggered concerns in South Korea over the continuity of these multi-billion-dollar export deals.

“However, Poland is unlikely to take a similar step to cancel previously signed procurements, as such a measure could lead to a massive diplomatic fallout, with the potential to endanger other engagements between the two countries, including in areas of industrial cooperation and energy security.”

With South Korean firm Korea Hydro & Nuclear Power Co. (KHNP) being shortlisted to build nuclear power plants to replace the present coal-fired power plants in 2023, a diplomatic spat with South Korea at this stage can disrupt these engagements as well for Poland.

Apsingikar continues:“Unavailability of a credit line to finance procurement from South Korea remains a major risk factor for the remaining unsigned procurement of 308 units of K9 SPH and 820 units of K2 Black Panther MBT covered under the framework agreement.”

South Korea is anticipated to redouble its efforts to expand its footprint in the other European defense markets if uncertainty continues over the unsigned portion of the envisaged procurement under the framework agreement with Poland.

Apsingikar concludes: “With South Korea having already successfully penetrated the Estonian, Norwegian, and Finnish defense markets with the sale of K9 SPH, efforts to market other South Korean equipment such as the K2 Black Panther MBT, Cheolmae 2 air defense system, K239 Chunmoo MLRS, Light Combat Helicopter, and the KF-21 Boramae will be expedited in the coming years.”