The expectations of the domestic shipbuilding industry are increasing regarding the new construction and maintenance, repair, and overhaul (MRO) business for U.S. Navy ships. U.S. President Donald Trump has emphasized cooperation in the shipbuilding industry between South Korea and the United States, and John F. Kelly, the U.S. Secretary of the Navy nominee, also mentioned the U.S. Pilgrim Shipyard acquired by Hanwha Ocean, noting that "attracting their capital and technology here is very important." Industry experts estimate that the scale of the MRO business for U.S. Navy ships is around 10 trillion won annually, while the new construction market size is estimated to be approximately 40 trillion to 50 trillion won per year.
According to the shipbuilding industry on the 10th, among domestic shipbuilders, HD Hyundai Heavy Industries and Hanwha Ocean have signed a Master Ship Repair Agreement (MSRA) necessary for entering the U.S. Navy ship MRO business. Hanwha Ocean successfully contracted with the U.S. Navy's 7th Fleet for the MRO of a 30,000-ton logistics ship last year, and in August of the same year, it secured the MRO business for a U.S. Navy logistics support ship.
This year, both Hanwha Ocean and HD Hyundai Heavy Industries bid for the MRO contract for one logistics support ship belonging to the U.S. Navy's 7th Fleet. Hanwha Ocean has set a goal of securing MRO business for up to six U.S. Navy ships this year, while HD Hyundai Heavy Industries aims for three ships. Additionally, HJ Shipbuilding & Construction, the top defense contractor in the shipbuilding sector, is preparing to sign the MSRA by organizing a task force.
According to the U.S. Government Accountability Office (GAO), the U.S. military's Navy MRO budget is around $6 billion to $7.4 billion (about 9 trillion to 11 trillion won) annually, but delays in warship MRO are frequent due to a lack of shipyards and aging facilities in the United States. The U.S. Navy is also expected to decommission an average of 10 ships annually until 2053, with an estimated average of about $30 billion (around 42 trillion won) in annual procurement for new ships until 2054.
The industry estimates that the total market size for U.S. Navy ships will reach approximately 502 trillion won by 2034, with the domestic shipbuilding industry expected to secure around 21 trillion won. The United States has never outsourced the construction of aircraft carriers, ballistic missile submarines, attack submarines, amphibious assault ships, or large surface combatants to foreign shipbuilders. Therefore, the industry believes that Korean shipbuilders can enter the MRO and new construction markets for small surface combatants, logistics support ships, and combat supply ships.
A researcher at the Mirae Asset Research Institute stated, "(Considering the new construction and MRO capable vessels) the effective market size for Korean shipbuilders is approximately 108 trillion won," adding that "the possibility of Australia and Japan, which have previously engaged in U.S. Navy ship MRO business, gaining an advantage is significant, so the market share for Korean shipbuilders is estimated at about 19%." If Japanese and Australian shipbuilders do not participate in the U.S. Navy's new construction business, the order amount for Korean shipbuilders will increase further.
A source from the shipbuilding industry remarked, "While the MRO business has lower added value than new ship construction, there is anticipation for future shipbuilding, so we are proceeding with it."