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By Jun Ji-hye
Korean arms manufacturers and military services companies saw a drop in their sales last year despite a boom in the global market, according to new international arms industry data released by the Stockholm International Peace Research Institute (SIPRI).
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SIPRI released a list of top 100 global arms companies for 2017, Monday, saying their sales totaled $398.2 billion, up 2.5 percent from 2016, and an increase of 44 percent since 2002.
Four Korean companies _ Korea Aerospace Industries (KAI), Hanwha Aerospace, LIG Nex1 and Daewoo Shipbuilding & Marine Engineering (DSME) _ were listed in the SIPRI Top 100, with combined arms sales of $5.5 billion, just 1.4 percent of the top 100 total.
All four companies saw a drop in sales, which led to an overall decrease of 23 percent compared with 2016. This was "the largest annual percentage decrease of any country's ranked companies in the Top 100 in 2017," the SIPRI said.
KAI and DSME suffered the largest reductions, with their ranking falling from 50th to 98th, and from 72nd to 85th, respectively, compared to 2016.
KAI saw a 53 percent decrease in sales, which accounted for 60 percent of the overall decrease in Korean arms sales
"Several of KAI's large programs for the Korean armed forces are coming to an end, while deliveries of new helicopters have been delayed," the SIPRI said.
DSME suffered a 25 percent fall in its sales. SIPRI noted that the firm's sales are likely to increase in the coming years owing to existing contracts with the Republic of Korea Navy and export customers.
The ranking of Hanwha Aerospace, which changed its name from Hanwha Techwin in April, fell from 40th to 49th, while that of LIG Nex1 fell from 56th to 60th.
An official from a local defense company said firms had a difficult time last year expanding their businesses due to government-led investigations into corruption allegations related to arms projects.
"Plus, the domestic market has reached saturation," he said. "Companies needed to overcome this through exports, but this was not easy, either."
He noted that these difficulties might last for some time.
In an effort to support exports of companies, the state-run Defense Acquisition Program Administration (DAPA) opened the Defense Export Promotion center (DExPro) in November, saying it will work hard to find new markets.
