Hanwha Aerospace (012450.KS) will spend $2.2 billion, or about 3 trillion won, to build an ammunition production hub on U.S. Army land in Arkansas.
Hanwha Defense USA, the company's American unit, announced the plan on the 21st at a ceremony opening its local office at Pine Bluff Arsenal, an Army installation in Arkansas.
Federal and state officials attending the event included Arkansas Governor Sarah Huckabee Sanders, Jordan Gillis, assistant secretary of the Army for installations, energy and environment, Arkansas Commerce Secretary Hugh McDonald and Representative Bruce Westerman.
Hanwha Defense USA was selected in January as the lease operator for the Pine Bluff Arsenal site through an Army solicitation, and the office opening marks the first step in carrying out the ammunition hub plan.
Hanwha Aerospace will build facilities on the site to produce 155mm shell components and propellant charges. The new complex will house an integrated manufacturing system that vertically consolidates the entire ammunition production process, from raw materials to finished products. The facilities are expected to expand U.S. ammunition production capacity and modernize an aging ammunition industrial base.
The company plans to invest $2.2 billion over the next seven years to develop the site, to be called the Hanwha Advanced Manufacturing Campus, and create about 400 jobs. Arkansas worked closely with Hanwha during the site selection process over the past 18 months, conducting tours of candidate locations in the state, meeting with executives during a trip to South Korea and holding talks at the Paris and Farnborough air shows.
Hanwha Aerospace plans to accelerate its U.S. expansion on the back of the investment. Last month, it signed a contract to supply prototypes of the K9MH wheeled self-propelled howitzer to the U.S. Army under the Mobile Tactical Cannon program, and it is building an assembly, integration and test facility for the equipment in Opelika, Alabama. The company aims to broaden its position in the U.S. ground defense market through the two pillars of the howitzer base in Alabama and the ammunition base in Arkansas, while contributing to a stronger South Korea-U.S. alliance.
"We are keeping our commitment to strengthen the U.S. defense industrial base through investment and job creation, built on Hanwha's manufacturing capabilities," said Michael Coulter, chief executive of Hanwha Defense USA. "We will help take the U.S. ammunition industry to the next level while actively contributing to expanded defense cooperation between the two countries."
