Estonia cooperates extensively both within NATO and with a wider block of allies. This week, South Korean defence giant Hanwha Aerospace has announced a direct investment package of nearly €100M in Estonia, with the total economic impact — including joint R&D activities with local companies — projected to reach up to €260M.
The investment aims to strengthen Estonia’s technological sovereignty and establish the country as a regional hub for territorial defence systems.
The announcement builds on a deepening bilateral relationship. In late 2024, Estonia signed a €290M contract with Hanwha to procure at least six Chunmoo multiple-launch rocket systems alongside three types of munitions. Hanwha had previously delivered six K9 Thunder self-propelled howitzers to the Estonian Defence Forces, making it one of Tallinn’s most significant defence procurement partners. Defence Minister Hanno Pevkur noted that Hanwha is also among the potential bidders for Estonia’s upcoming naval overhaul.
The investment breaks down into two principal components.
- Approximately €25M will go towards establishing a 40 mm ammunition production facility in Estonia, to be operated in cooperation with a local manufacturer, with a projected capacity exceeding 300 000 rounds per year.
- A further €23 million will fund a dedicated maintenance, repair, and overhaul (MRO) competence centre, enabling Estonia to independently service its Chunmoo and K9 systems — and potentially infantry fighting vehicles in future. Hanwha will also provide specialised training programmes for Estonian Defence Forces personnel.
The location of the ammunition factory has not yet been confirmed, though as reported by ERR, Minister Pevkur indicated it will likely be one of four sites identified under Estonia’s special spatial plan for explosives-related defence industry: near Tõstamaa in Pärnu County, near Piirsalu in Lääne County, or at one of two sites in Ida-Viru County.
Estonian companies already cooperating with or set to sign agreements with Hanwha Aerospace include Nortal, Sensus Q, Frankenburg Technologies, Marduk Technologies, and Milrem Robotics — showing the breadth of Estonia’s domestic DefenceTech and dual-use sector.
Are you interested in trading with Estonia? Enterprise Estonia provides sourcing services for foreign enterprises. Contact Estonian export advisors or use our free e-consulting service to start trade with Estonia.
