Knocking on Door of
Military Hardware Market
Hyundai Rotem seals $400 mln deal with Turkey for tank production technology and service
Hyundai Rotem Co., a Korean manufacturer of armored vehicles including tanks, has stepped up its push into the world market for armored vehicles recently by concluding a $400 million contract to provide the technology for the production of military tanks codenamed "Black Leopard"with the Auto Car Co. in Turkey, Hyundai Rotem said recently.
Under the contract, the largest ever made by a Korean defense industrial company with a foreign company, the Turkish company will produce 200 tanks with the technology and advisory services provided by Hyundai Rotem until 2015.
Hyundai Rotem will provide the technologies developed over the past 30 years jointly with the Agency for Defense Development (ADD) including those for the production of K1, K1A1 and K2 (Black Leopard) tanks, tank engines, transmissions, automatic tank gun shell loading systems, gun barrels and shells. Turkey is said to be most interested in the Black Leopard tank, which can submerge 4 meters underwater and move, Hyundai Rotem sources said.
They said about half of the parts required in the early stages of the production of the tanks will be provided by the company. Turkey will, however, develop the gun firing control system by itself.
The company will receive $400 million from Turkey for parts and technologies provided to Turkey and the expenses for some 20 engineers who will travel to Turkey to advise on the production of the first four Black Leopard tanks.
Hyundai Rotem was selected as the priority bidder in an open bidding held last year, outbidding German companies, which traditionally supplied military tanks and technologies to Turkey.
The contract with Turkey is likely to push up the exports of military hardware and technology to over $1 billion this year, beating last year's record of $840 million.
From early in the year, the company has been busy winning military hardware contracts in such countries as Tunisia, Kazakhstan and Iran in competition with such world giants in the military hardware industry as Siemens and Alsthom, gaining international recognition for its high-level technologies and building a stable backlog of orders.
Hyundai Rotem won six large orders for rail cars early in the year both at home and overseas worth some 1 trillion won.
The company, in cooperation with Hyundai International, one of its sister companies affiliated with the Hyundai Automotive Group, won the contract to supply 28 rail cars in Kazakhstan, which is a traditional market for Russia with a strong presence in Central Asia.
The company followed its success in the central Asian country with another business coup in Algeria, this time winning a contract to supply 76 rail cars, beating such rivals as Alsthom and CAF of Spain. The company put itself in a very good position to win additional orders in Northern Africa including Libya, where the need for rail cars has been growing, by clinching the contract in Algeria, company officials said.
The company has made its presence known in 32 countries around the world by consummating commercial deals with companies in those countries, thanks to an extensive study of overseas markets for its products during the past 40 years of its operation.
When Hyundai Automotive Group took over Rotem in 2001, its annual sales amounted to only 600 billion won. Its annual sales have expanded nearly threefold since that, reaching 1.7 trillion won last year.
The company aims to expand its sales to 2.5 trillion won this year from the sale of such key products as rail cars, heavy equipment and plant equipment with 1.3 trillion won coming from the sale of rail cars alone.
Hyundai Rotem first exported rail cars to Hong Kong in 2004, winning recognition for its high-level technology, which led to a bonus order of $2.7 million from the Hong Kong government.
Company officials said they will export the products under the Korea brand, which is known around the world, not just exporting them for the sake of expanding overseas sales of the products for the company. They will try to make the company a global up-and-comer in the rail car industry as well as the military hardware industry. nw
A model of K2 tank named, "Black Leopard"whose production technology will be transferred to Turkey by Hyundai Rotem, its maker.