Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
HD Hyundai seeks to export more naval ships
The Jeongjo the Great destroyer, left, is at anchor next to the Chungnam frigate on the quay of HD Hyundai Heavy Industries shipyard in Ulsan, Monday. Courtesy of HD Hyundai
By Park Jae-hyuk
Shipbuilder targets Southeast Asia, Middle East, Latin America
ULSAN — Foreign employees at domestic shipyards have been prohibited from naval ship construction zones, despite the Korean shipbuilding industry’s heavy reliance on migrant labor.
Starting in December, however, dozens of foreign workers will participate in the construction of warships at HD Hyundai Heavy Industries’ (HHI) shipyard in Ulsan.
“Around 60 proven Filipino workers holding E-7 visas will join the construction of corvettes to be exported to their homeland,” HD HHI Executive Vice President Park Yong-yeol, head of naval and special ship production and planning, told reporters at the company’s shipyard, Monday. “They will also learn from us about how to build naval ships.”
The unusual personnel exchange is a result of the shipbuilder’s attempt to focus more on exporting naval ships than selling its warships to the Korean Navy.
According to HD HHI, the Philippines asked the Korean firm to build 10 naval ships, including two corvettes, to modernize the country’s navy. On Wednesday, Philippine Flag Officer-in-Command Toribio Dulinayan Adaci Jr. visited HD HHI’s shipyard to attend a ceremony to celebrate the beginning of the construction of the corvettes for the Southeast Asian country.
Philippine Flag Officer-in-Command Toribio Dulinayan Adaci Jr., center, and HD Hyundai Heavy Industries Senior Executive Vice President Joo Won-ho, second from left, head of naval and special ship business unit, cut the ribbon during a ceremony to celebrate the beginning of the construction of corvettes for the Southeast Asian country at the Korean shipbuilder's shipyard in Ulsan, Wednesday. Courtesy of HD Hyundai
HD HHI Senior Executive Vice President Joo Won-ho, head of naval & special ship business unit, said the company’s export of naval ships must be increased for the business unit to achieve its goal of generating 2 trillion won ($1.5 billion) in annual revenue by 2030.
He also said that demand for naval ships is growing from Southeast Asia and the Middle East amid intensifying geopolitical tensions, as well as from Latin American countries in the wake of the retirement of submarines they imported from Germany.
Choi Tae-bok, the business unit’s director of strategic communication, who was a former naval officer, emphasized that it is impossible to make enough profit from selling warships to the Korean Navy, due to the soaring construction costs.
“From an industrial perspective, Korea needs strategies to upgrade its naval ship sector,” he said.
To show its ability to build warships, HD HHI allowed reporters to look around the interior of the newly-built Aegis destroyer named after King Jeongjo the Great of the Joseon Dynasty (1392-1910). Journalists were also able to see the exterior of the Korean Navy’s next-generation frigate, the Chungnam, which is also called a “mini-Aegis” ship.
The floors and important weapon systems of the two ships were covered to prevent any damage before actual operations. After multiple test operations, they will be delivered to the Korean Navy next year.
HD HHI explained that the Jeongjo the Great destroyer is equipped with advanced defense and strike systems, compared to the previous Aegis destroyer. It also has the ability to detect, trace and intercept the enemy’s ballistic missile on the sea.
Given that the Korean Navy’s Aegis system reportedly succeeded in tracking the North Korean rocket launched on Tuesday, the planned deployment of the Jeongjo the Great destroyer is expected to help strengthen South Korea’s national defense.
HD HHI also seeks to participate in a project to build submarines for the Canadian Navy. The company has developed various submarine technologies, such as a power supply system using lithium batteries.
“The project’s size is too big for a single company to undertake, so domestic shipbuilders and the government should organize a team to win the order,” Joo said.
In response to a question about HD HHI’s plan to enter the U.S. naval ship market, he answered that the company is considering various options, including the acquisition of an American shipbuilder, investments in a local firm and the establishment of a local subsidiary.