Washington: The US-based subsidiary of South Korea’s largest defence contractor is laying the groundwork to become a prime supplier for land systems in the US by the end of the decade, and “all options are on the table” for the company to achieve its goal, said Hanwha’s USA Chief Executive Officer John Kelly.
The company’s planning predates the war in Ukraine, but the demand for weapons and ammunition is now outstripping supply throughout much of the West as the fight drags on, leading major military powers like the US searching for new sources, Kelly said.
The American supply chain, like those of other countries, “tends to be quite well protected. And it makes it difficult for a foreign-owned business to break in,” Kelly said here. “I think you’ve seen that paradigm stretch now, because there is just literally not enough supply going around.”
Hanwha has invested in some facilities to get the ball rolling on its US ambitions, opening a headquarters in McLean, Va. as well as an engineering design centre in Detroit, Mich. But it’ll need a major new development to fully realize its plans, with Kelly raising the prospect of moves like partnerships or mergers and acquisitions.
The company’s strategy is “very much about being a prime contractor that can compete with the other peers that are here. And how do you get there? It’s about partnerships. It’s about organic growth. It’s about M&A type of capability,” Kelly said, adding that “all options are on the table at the moment” while preserving “a bit of agility to be able to move between them.”
Once “things progress” for the company, Kelly said Hanwha would then “look at transferring manufactur[ing]” into the US. The company has been working for two years to clear regulatory hurdles for foreign-owned businesses, according to Kelly, and is “almost there.”
