Hanwha to invest $5 bil. in Philadelphia shipyard to build naval vessels in US

Hanwha Group Vice Chairman Kim Dong-kwan speaks during the naming ceremony of the TS State of Maine at Hanwha Philly Shipyard in Philadelphia, Pa., Tuesday (local time). Yonhap

Hanwha Group announced Wednesday it will invest $5 billion in its shipyard in Philadelphia as part of the so-called "Make American Shipbuilding Great Again" (MASGA) project, which was agreed upon last month during the Korea-U.S. tariff talks as part of efforts to rebuild the U.S. shipbuilding industry.

The size of the planned investment is 50 times larger than the $100 million it spent to acquire the shipyard last year. It also exceeds the $70 million the White House claimed earlier this month was the size of Hanwha's investment to expand the Philadelphia shipyard.

Hanwha unveiled the investment plan as President Lee Jae Myung visited Hanwha Philly Shipyard on Tuesday (local time), a day after his first summit with U.S. President Donald Trump at the White House.

Lee attended a ceremony to christen the U.S. Maritime Administration's third national security multi-mission vessel as the State of Maine. The training vessel is the first ship built at the shipyard since the Korean conglomerate's acquisition.

“Today's christening ceremony is the embodiment of our two nations working side by side to revive the industry for the sake of shared security and prosperity,” Hanwha Group Vice Chairman Kim Dong-kwan said at the event. “We are creating good manufacturing jobs, building the world's most advanced ships and fostering a new skilled workforce right here in America.”

Having frequently expressed his willingness to cooperate with Korean shipbuilders to rebuild U.S. shipyards and counter China's maritime ambitions, Trump told Lee at the summit that the U.S. will buy ships from Korea and have Korean companies build ships in U.S. territory using American labor.

Workers wear hats embroidered with the slogan, "Make America Shipbuilding Great Again," and the national flags of Korea and the United States, during the naming ceremony of the TS State of Maine at the Hanwha Philly Shipyard in Philadelphia, Pa., Tuesday (local time). Yonhap

Aligning with the U.S. president's plans, Hanwha said the $5 billion investment will be dedicated to installing two additional docks and three quays to increase the shipyard's capacity. That fund will be a part of Korea's commitment of $150 billion in investments for the MASGA project. The company is also reviewing plans for a new block assembly facility.

Through this expansion, Hanwha aims to increase the shipyard's annual production volume from fewer than two vessels to up to 20, and have the capacity to produce liquefied natural gas (LNG) carriers, naval modules and blocks.

These efforts have been backed by Hanwha Shipping, the U.S. subsidiary of Hanwha's shipping arm, which placed orders with the shipyard for 10 medium-range oil and chemical tankers, with the first tanker expected by early 2029. The shipping firm also announced it has exercised its option to order a second LNG carrier from the shipyard. Last month, Hanwha Shipping signed a contract for the first U.S.-ordered export-market-viable LNG carrier in nearly 50 years.

In the long term, Hanwha seeks to construct naval vessels at its U.S. shipyard.

Despite its reputation as one of the oldest shipyards built for the U.S. Navy, the shipyard lacks a license to build naval vessels, so Hanwha is pushing ahead with efforts to obtain the license as early as the end of this year.

“This is just the beginning. Hanwha is committed to being a partner in building the next chapter of American shipbuilding,” the Hanwha vice chairman said.

Hanwha's ambitious plans signal the beginning of a fierce competition among Korea's leading shipbuilders.

A day before Hanwha's announcement, HD Hyundai said it was seeking acquisitions and modernizations of U.S. shipyards through the joint creation of a multibillion-dollar investment fund with the state-run Korea Development Bank and Cerberus Capital, a U.S. private equity firm. Samsung Heavy Industries aims to maintain, repair and overhaul U.S. Navy ships in collaboration with Vigor Marine Group, a U.S. ship repair company.

Korean shipbuilders are also expected to vie to invite Trump to their shipyards in Korea during the upcoming APEC Summit, as the U.S. president expressed his interest in attending the international event scheduled to begin in late October in Gyeongju, North Gyeongsang Province.