The 50-50 joint venture that will turn out parts for indigenous South Korean ground-to-air missiles marks the first ever transfer of non-American missile-related technology to Washington's key East Asian ally.

Samsung Thomson-CSF Co. Ltd. will be based in the southern Korean city of Kumi and capitalized at 270 billion won (240 million dollars), Samsung said.

The new entity will explore overseas markets by combining Samsung's electronics technology and Thomson-CSF's global network to sell products worth 200 billion won in 2000 and one trillion won by 2005, the Korean firm said.

"Samsung Thomson-CSF envisions an integrated defense firm in the 21st century by establishing an advanced management system and also making inroads into the global market," it said in a statement.

The venture will take over Samsung's defense business which has focused on parts for ground-to-air missiles, it added.

South Korea began churning out its "Chonma (Pegasus)" ground-to-air missiles, which have a range of 10 kilometers (six miles), in December with imported French technology.

Under the joint venture deal, Samsung and Thomson agreed to provide a complete range of systems and equipment in electronic imagery, military communications, naval combat and ground-to-air missiles.

The French group has described its joint-venture agreement with Samsung Electronics as the first business of its type in Asia.

The agreement dealt a blow to the US defence industry which has traditionally dominated the defense market in South Korea. Seoul is one of Washington's key allies, and both are still technically at war with communist North Korea.

Seoul has long sought technology transfers for missiles to counter North Korea's strident missile program.

But Washington has been reticent to pass over some of its most sensitive missile technology for fear of sparking an arms race on the Korean peninsula.

In addition, France has been locked in a long battle with American suppliers to gain a major foothold in South Korea's lucrative defense procurement market.

South Korea has sought to develop Chonma as the backbone of its defensive missile system since Pyongyang test-fired a ballistic missile in August last year, sparking alarm in the region.

South Korea and the United States will sit down in Hawaii later on Tuesday for tricky negotiations over Seoul's bid to extend its missile range from 300 kilometers (187.5 miles) to 500 kilometers.

Seoul has complained its existing missiles cannot hit any targets beyond the North Korean capital Pyongyang, falling far short of its perceived need to have the entire country within range.

On Monday, a South Korean foreign ministry spokesman warned: "In the case of military missiles, South Korea will make utmost efforts to secure such ranges as necessary to meet the demand for military security."

South Korea's missile drive prompted an angry response from North Korea.

"They are imploring the US to allow the increase of missile range to 300 kilometers and development of missile range up to 500 kilometers," the North said Tuesday through its official agency monitored here.

"This clearly shows how recklessly they are running amok in their preparations for a war of aggression against the North from the beginning of the year."

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MILSPACE
South Korea Seeks Longer Range Missiles
by Jun Kwan-Woo
Seoul (AFP) February 7, 2000 - South Korea warned Monday it needs to develop attack missiles with sufficient range to combat North Korea's military and security threat, as it prepared for prickly negotiations with Washington.

Korean Space and Military Issues At SpaceDaily