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, Hanwha compete to export naval ships to Five Eyes
HD Hyundai Heavy Industries executives pose with government officials from nine foreign countries and representatives of the Ministry of National Defense and the Defense Acquisition Program Administration after a signing ceremony for the delivery of the Shin Chae-ho submarine to the Republic of Korea Navy at the shipbuilder's shipyard in Ulsan, April 4. Courtesy of HD Hyundai
By Park Jae-hyuk
Race heats up between local shipbuilders to enter US MRO market
HD Hyundai Heavy Industries (HHI) and Hanwha Ocean have intensified competition to expand their presence in the rapidly growing global naval ship market, according to industry officials, Friday.
The two Korean shipbuilders have particularly focused on the U.S. naval vessel maintenance, repair and overhaul (MRO) market. They have intensified their efforts to appeal to the Five Eyes, an Anglosphere intelligence alliance consisting of Australia, Canada, New Zealand, the U.K. and the U.S. This approach extends beyond their established customer base, which includes navies in the Middle East, Southeast Asia, Eastern Europe and Latin America.
Both companies sent officials in charge of their respective naval ship businesses to Sea Air Space 2024, the largest maritime defense expo in North America which was held in Washington, D.C., between Monday and Wednesday (local time). However, the two firms did not open exhibition booths there.
Joo Won-ho, left, head of HD Hyundai Heavy Industries' naval and special ship business unit, shakes hands with GE Aerospace Vice President Rita Flaherty after signing a memorandum of understanding on the sidelines of Sea Air Space 2024 in Washington, D.C., Tuesday (local time). Courtesy of HD Hyundai
On the sidelines of the event on Tuesday (local time), HD HHI signed a memorandum of understanding (MOU) with GE Aerospace, an American turbine engine supplier, to develop propulsion systems. They also agreed to cooperate in MRO for exported warships and in a bid for the Royal Australian Navy frigate project.
The Korean firm signed a separate MOU the same day with L3Harris Technologies, an American defense contractor, to win submarine orders from the Royal Canadian Navy.
On April 4, HD HHI invited over 20 government officials from nine foreign countries to a signing ceremony for the delivery of a 3,000-ton diesel submarine named after famous Korean independence activist Shin Chae-ho (1880-1936) to the Republic of Korea Navy, which was hosted by the Ministry of National Defense and the Defense Acquisition Program Administration at the shipbuilder’s shipyard in Ulsan.
The company was also selected as the preferred bidder last month to jointly build four warships for the Peruvian Navy with the Latin American country’s state-owned shipbuilder.
“We will consolidate our status as Korea’s leading naval ship company by securing technologies optimized for warship exports through cooperation with global defense companies,” said Joo Won-ho, head of HD HHI’s naval and special ship business unit.
Hanwha Ocean Vice President Jeong Sung-kyun, left, introduces the company's submarine technologies to foreign government officials at its headquarters on Geoje Island, South Gyeongsang Province, April 5. Courtesy of Hanwha Ocean
Hanwha Ocean invited foreign government officials including those from the U.S. and Australia to its shipyard on Geoje Island, South Gyeongsang Province, April 5, to present its submarine technologies.
“With the world’s most powerful Jang Bogo-3 Batch-II submarine, we will export our submarines to Poland, Saudi Arabia, Canada and the Philippines, making efforts to enter the U.S. MRO market,” a Hanwha Ocean official said.
The shipbuilder also plans to open an exhibition booth next month at the CANSEC 2024, Canada’s leading defense and security event held annually in Ottawa.
Last month, the Korean firm decided to issue new shares to increase the capital of Hanwha Ocean USA Holdings by 181.8 billion won ($133 million), so that the company can expand its presence in the U.S. market. It also seeks to acquire Austal, an Australian shipbuilder and defense contractor, with the aim of receiving frigate orders from the Royal Australian Navy.
U.S. Secretary of the Navy Carlos Del Toro, who visited the shipyards of HD HHI and Hanwha Ocean in February, recognized the Korean shipbuilders for building high-quality vessels with relatively low costs.
“When my team and I went to Korea, we were floored at the level of digitization and real-time monitoring of shipbuilding progress, with readily available information down to individual pieces of stock materials,” he said during an event organized by the Navy League in Maryland on Tuesday (local time). “Their top executives could tell us — to the day — when ships would be delivered.”
He previously invited HD Hyundai Vice Chairman Chung Ki-sun and Hanwha Group Vice Chairman Kim Dong-kwan to his office at the Pentagon. However, it remains uncertain when the two vice chairmen will fly to the U.S.