After Egypt, Poland... CEO Lee Yong-bae Heads to Poland for K2 Tank Final Contract

President Yong-bae Lee's Overseas Orders 'Miracle'
Hyundai Rotem Expected to Surpass 100 Billion KRW Operating Profit This Year After Loss in 2019

[Asia Economy Reporter Park Sun-mi] Lee Yong-bae, president of Hyundai Rotem, will sign the first-ever overseas export main contract for the Korean military's main ground weapon, the K2 tank, in Poland on the 26th. This follows a 'jackpot' railway order worth 30% of sales in Egypt, marking another large-scale overseas order achievement.

According to the Ministry of National Defense and the defense industry on the 24th, President Lee will participate in the main contract signing ceremony for the Polish version of the K2 tank export held in Poland on the 26th. Currently on a business trip to Egypt, Lee initially planned to return to Korea after completing his local schedule, but with the confirmation of the main contract schedule with Poland, he decided to attend the ceremony scheduled for the 26th.

As the war between Ukraine and Russia has prolonged for over six months, European defense budgets have increased. Taking advantage of this, Hyundai Rotem signed a basic contract in July with the Polish Military Procurement Office for urgent needs of the K2 tank and 1,000 units of the Polish version of the K2 tank. The upcoming main contract will specify detailed terms such as delivery schedules for the first and second batches, detailed specifications, training, and maintenance conditions.

Hyundai Rotem plans to first supply the urgently needed domestically produced K2 tanks to Poland, then fulfill the contract by delivering quantities produced at the local Polish factory along with domestically produced units. Industry sources report that through this main contract, exports of about 180 K2 tanks worth approximately 4 trillion KRW from the first batch will be confirmed. Poland showed active efforts to push the contract by conducting an on-site inspection of the K2 tanks at Hyundai Rotem's Changwon plant in May for this contract signing.

President Lee also achieved a large-scale 'jackpot' order in Egypt.

He recently received a notification of award from the Egyptian Tunnel Authority for the supply and localization project of electric trains for Cairo Metro Lines 2 and 3 and is known to have departed for Cairo to sign the contract. Hyundai Rotem holds an 86% stake in the consortium, with Egyptian local manufacturer NERIC holding 14%. Of the total project scale of 861.2 billion KRW, Hyundai Rotem is responsible for 738.4 billion KRW worth of the project.

The industry expects Hyundai Rotem to record its highest-ever export performance this year due to its consecutive order successes.

Hyundai Rotem's performance in the first half of this year was 1.4632 trillion KRW in sales and 55 billion KRW in operating profit. The green light is on for the first annual operating profit to surpass 100 billion KRW. Hyundai Rotem operates through three interconnected business units: Rail Solution (63%) for railway business, Defense Solution (28%) for defense business, and Eco Plant (9%) for the rest.

In 2019, Hyundai Rotem was under an emergency management system with a deficit of 279.9 billion KRW, but since President Lee took over in 2020, the company has focused on restructuring low-profit businesses and concentrating on high value-added overseas orders, resulting in remarkable achievements. Lee Sang-heon, a researcher at Hi Investment & Securities, said, "Especially, the growth potential of Hyundai Rotem's defense exports is expected to become visible," adding, "The Polish export will serve as a foothold for future European exports."

This content was produced with the assistance of AI translation services.