Recently, HD Hyundai Heavy Industries and Hanwha Ocean reached an agreement to form a one team initiative for their defense export business, raising interest in whether they can achieve success in the overseas military ship bidding competition. The two companies agreed to cooperate, with HD Hyundai Heavy Industries focusing on surface ships and Hanwha Ocean on submarines.
According to foreign reports on the 4th, last month, the Chief of Naval Operations of Indonesia proposed to the Ministry of National Defense the introduction of non-combat aircraft carriers as part of enhancing maritime security and fleet modernization, after which various options have been discussed. Besides direct construction by Indonesia's state-owned shipbuilder PT PAL, if collaboration with foreign shipbuilders occurs, HD Hyundai Heavy Industries, Hanwha Ocean, and Italy's Fincantieri are being considered as candidates.
The Indonesian Navy is said to have expressed interest in HD Hyundai Heavy Industries' track record of securing ship orders in New Zealand and the Philippines, as well as currently building vessels at a local shipyard in Peru. Hanwha Ocean previously exported submarines to Indonesia during the Daewoo Shipbuilding & Marine Engineering era. Some observers predict that if South Korea participates in the bidding, it is highly likely that the focus will be on HD Hyundai Heavy Industries.
In the shipbuilding and defense industry, there are expectations that HD Hyundai Heavy Industries and Hanwha Ocean, by choosing to coexist in the export market, can consolidate their capabilities and enhance their negotiation power and competitiveness in international competition. Earlier, HD Hyundai Heavy Industries and Hanwha Ocean signed a memorandum of understanding (MOU) to form a one team for the defense export project on the 25th of last month, agreeing that HD Hyundai Heavy Industries would lead the export of surface ships while Hanwha Ocean would head the submarine export project. As public sentiment grew regarding the impact of emotional disputes between the two companies on national interests after the failed bid for Australian frigates last year, they joined forces.
The two companies plan to focus their efforts primarily on winning the Canadian submarine project, which is estimated to be worth between 60 trillion and 70 trillion won, led by Hanwha Ocean. The Canadian Navy plans to introduce up to 12 new submarines, with the first delivery targeted for 2035. In addition to Hanwha Ocean and HD Hyundai Heavy Industries, Germany's Thyssenkrupp, Sweden's Saab, France's Naval Group, and Spain's Navantia have expressed intentions to bid. Industry insiders believe that if only Hanwha Ocean participates in the bidding, it would likely lead to competition between Team Korea and Team Germany. Hanwha Ocean, HD Hyundai Heavy Industries, and the Defense Acquisition Program Administration conducted a closed meeting regarding the export of Canadian submarines last month. The Canadian government aims to finalize contracts by 2028.
Hanwha Ocean is likely to take the lead in securing submarine projects being pursued by Poland, the Philippines, and Saudi Arabia. Hanwha Ocean has been working diligently to finalize defense exports after signing a strategic partnership agreement with the British defense firm Babcock International Group in November of last year for Canadian and Polish submarine bids. In contrast, HD Hyundai Heavy Industries is expected to represent the bidding in surface ship projects in Malaysia, Thailand, and Saudi Arabia.
There is interest in whether HD Hyundai Heavy Industries and Hanwha Ocean can continue to cooperate in the construction of naval vessels for the U.S. Navy and in maintenance, repair, and overhaul (MRO) activities. Hanwha Ocean was the first among domestic shipbuilders to secure two MRO projects for the U.S. Navy last year, setting a goal to win five to six U.S. naval MRO projects this year. HD Hyundai Heavy Industries has also stated its intention to participate in the U.S. MRO market in earnest starting this year.