The Victorian Government is backing Hanwha Defense Australia to build and maintain Australian military vehicles in Geelong, in a move that stands to create hundreds of highly-skilled local jobs.

Minister for Industry Support and Recovery Martin Pakula on 12 January signed a Memorandum of Understanding with Hanwha, a major South Korean global company, to formalise a long-term partnership that will support the establishment of Hanwha’s defence manufacturing operations in Victoria. Pakula was at Laverton North to see Hanwha’s LAND 400 Phase 3 vehicle, after the Commonwealth selected Hanwha as one of two final tenderers, along with Rheinmetall in Queensland.

“Victoria is the home of Australian manufacturing and we are pleased to be working with Hanwha to maximise opportunities for more high-value jobs to be created in Geelong,” said Pakula. “The range of companies working in defence industries is staggering, and we’re backing them to grow further.”

A PWC report commissioned by Hanwha estimated that the LAND 400 Phase 3 manufacturing effort would generate $5.7bn in total economic impacts in Victoria. Hanwha is also looking to build 30 self-propelled howitzers and 15 armoured resupply vehicles in Geelong, and carry out maintenance and repairs during their years of service for the Australian Army, having been recently announced as the sole tenderer for the Commonwealth’s LAND 8116 tender.

The MoU will enable the Government and Hanwha to explore investment opportunities in defence and non-defence sectors. The partnership will strengthen Victoria’s relationship with South Korean industry, driving collaboration and creating opportunities for expanded bilateral trade and investment. Founded in 1952, Hanwha has grown to become South Korea’s largest defence company and also operates in aerospace, fintech, mining and clean energy.

“Hanwha is delighted to enter into this MoU with the Victorian Government,” said Hanwha Defense Australia managing director Richard Cho. “We see it as a strong platform from which to develop our mutual interests in a range of technologies and to establish an advanced manufacturing facility here in Victoria.”

Victoria’s defence sector contributes $8.4bn annually to the state’s economy with 6,300 small-to-medium businesses working across military vehicle production, maritime design, aerospace components, digital and cyber security, and munitions. The Victorian Budget 2020/21 allocated $6m to give the state’s defence sector a competitive edge so it can capture a large share of Australia’s biggest ever defence spend.