SpaceX Has Another Challenge With South Korean Rocket Ambitions

The company is part of the Hanwha Group, a 71-year-old conglomerate that started as an explosives manufacturer, branched out into arms sales and is now moving into green energy, defense and aerospace. Cash from arms sales to Ukraine’s neighbors is helping finance efforts to expand Hanwha’s two-year-old space business.

Nuri, a rocket developed by the Korea Aerospace Research Institute using Hanwha’s engines, is not reusable, but the goal is to eventually halve launch prices to match SpaceX by 2032, said Yu Dongwan, senior executive vice president of Hanwha Aerospace. said in an interview.

SpaceX’s Falcon 9 currently costs about $67 million per launch.

“Initially we may be a niche player and eventually, we hope to catch up with SpaceX,” Yu told Bloomberg Television in Seoul.

Hanwha Aerospace shares have gained more than 30% this year after jumping 53% in 2022, when Hanwha Group merged all of its defense businesses into Hanwha Aerospace. Hanwha Group is a family controlled group; Heir-apparent Dong Kwan Kim, a Harvard University graduate, leads the aerospace business.

Like other rivals, Hanwha Aerospace is seeking to become more than a rocket company and push into satellite operations, moon exploration and resource extraction.

Hanwha Aerospace, a rival to SpaceX’s Starlink satellite internet service, has bought a 9% stake in British satellite startup OneWeb Ltd. Parent Hanwha Group is in the process of buying a 49.3% stake in submarine maker Daewoo Shipbuilding & Marine Engineering to be the largest shareholder.

South Korean President Yoon Suk Yeol has made it his goal to develop a domestic commercial-rocket industry. Last year, Hanwha Aerospace won a bid to jointly develop the country’s next-generation commercial rocket with the government.

Hanwha, which has so far only worked on aircraft components and engines, plans to build three more Nuri rockets with government researchers. In Japan, Mitsubishi Heavy Industries Ltd.’s H3 rocket – which recently failed to reach orbit – is targeting $50 million per launch.

Yu said the demand for Korean rockets will initially be driven by the government, but the goal is to eventually reduce it by half. He said Hanwha wants to develop the next-generation rocket on its own.

“We’re aiming for a reusable rocket,” Yu said. “It’s something we’ll have to develop on our own” because foreign companies “are unwilling to share that technology with us,” he said.

arms exporter

Hanwha is one of the world’s fastest growing aerospace and defense contractors. Hanwha Systems, a subsidiary of Hanwha Aerospace, was ranked third in revenue growth among 100 companies analyzed by PwC in its 2022 Global Aerospace and Defense Report. Among Asian firms, it was No.1.

Last year, Hanwha Aerospace posted record sales of 6.5 trillion won ($5 billion) with record operating profit, led by weapons. It signed a new contract with Poland and a partnership with Romania, which both neighbors Ukraine, as well as Egypt.

According to a report by the Stockholm International Peace Research Institute, South Korea’s arms exports are set to increase by 74% in 2022, compared to a 35% decline for the UK, a 4.4% drop for Spain and a 15% drop for Israel I.

South Korea is uniquely positioned in the global arms market with weapons that are relatively inexpensive and are meant to defeat Soviet-based conventional systems used by neighboring North Korea. Hanwha’s K-9 guns were used during a firefight between the two Koreas on Yeonpyeong Island in 2010.

“Hanwha is making a tremendous amount of money selling weapons,” said Lee Dong-heon, an analyst at Shinhan Financial Investments in Seoul. “So the firm has the potential to invest in aerospace.”