South Korea increases focus on ‘parts localisation'

Funding allocated to DAPA's defence parts localisation programme has expanded sixfold in the past two years. (Janes)

South Korea has stepped up its programme to replace defence imports, allocating a sixfold increase in funding for dedicated ‘parts localisation' projects in the past two years, new data shows.

According to the DAPA data, funding for parts localisation projects in 2021 was KRW88.6 billion (USD70.8 million), while in 2018 the figure was KRW14 billion. The data also shows that funding towards the objective has increased every year since 2016.

In addition, the number of projects dedicated to towards parts localisation grew up to 51 in 2021, more than the combined number of such projects between 2016 and 2020.

A spokesperson from DAPA told Janes that the parts localisation programme, while being in place for more than a decade, has become a focus point for South Korea in recent years as part of efforts to grow domestic small and medium-sized enterprises (SMEs).

He added that even greater increases are expected in the next few years.

“The programme is effective: the localisation rate of weapon systems has steadily increased as have sales of locally made defence parts,” said the spokesperson.

“The programme started in 2010 but has expanded in earnest from 2021. The tangible effect of this expansion will be more clearly witnessed after two to three years.”

The spokesperson also said that, going forward, “the budget of the programme will continue to expand”.

“DAPA plans to expand support for the local production of parts that are applicable to a wide range of weapon systems and require more time [to develop] and funding,” he said.