HD Hyundai Heavy Industries and Hanwha Ocean Pursue Regional Strategies
Special-Purpose Ship Sales Account for a Growing Share of Total Revenue Each Year
HD Hyundai Heavy Industries and Hanwha Ocean are expected to surpass 7 trillion won in special-purpose ship sales by 2028. The special-purpose ship market is projected to grow rapidly, driven by the global trend of increased military spending and rising maritime security threats.
According to industry sources on May 9, combined special-purpose ship sales for HD Hyundai Heavy Industries and Hanwha Ocean are expected to exceed 7 trillion won in 2028, more than triple their 2024 sales. Last year, Hanwha Ocean recorded 1.0527 trillion won and HD Hyundai Heavy Industries posted 1.1447 trillion won in related sales. In the first quarter of this year, Hanwha Ocean's special-purpose ship sales were about 303.4 billion won, while HD Hyundai Heavy Industries' sales were approximately 181.2 billion won.
The two leading companies in the special-purpose ship sector are forecasting annual sales of 7 trillion won due to high expectations for new orders from countries such as Canada, Peru, and Poland. Both companies have formed the "K-Ship Defense One Team" to pursue the 60 trillion won "Canada Patrol Submarine Project (CPSP)." Separately, HD Hyundai Heavy Industries, which has strengths in surface vessels, is focusing on the Peruvian market. In January, the company held a joint keel-laying ceremony for four ships?including a frigate, an offshore patrol vessel, and a landing ship?at Peru's state-owned SIMA Shipyard, and is currently constructing them. These vessels are scheduled to be delivered sequentially to the local navy starting next year. In addition, HD Hyundai Heavy Industries signed a memorandum of agreement (MOA) with SIMA Shipyard for the joint development of submarines in Peru. The MOA is part of the Peruvian Navy's project to replace aging vessels, and calls for building a 1,500-ton class mid-sized submarine based on HD Hyundai Heavy Industries' HDS-1500 model to replace existing submarines. In the second half of this year, the company also plans to compete for special-purpose ship orders in the Philippines and Saudi Arabia.
Hanwha Ocean, which has experience exporting submarines, has decided to target the Polish market. Poland is pursuing the 8 trillion won "Orka Project" to acquire three submarines as part of its naval modernization. The preferred bidder is expected to be selected in the second quarter, with the final contractor to be chosen in September. Hanwha Ocean aims to win an order for three next-generation submarines based on the Jangbogo (KSS)-III Batch-II platform. The company has proposed leasing one KSS-I class submarine to Poland until delivery of the new vessels after the contract is awarded. Hanwha Ocean has also offered a comprehensive solution, including the establishment of a permanent maintenance, repair, and overhaul (MRO) center in Poland and an investment of 100 million dollars (about 142.8 billion won).
Hanwha Ocean has been working to secure the Orka Project contract by strengthening local ties early on. In March, the company sent delegations to Poland's Remontowa Shipyard and Nauta Shipyard. At that time, Hanwha Ocean presented a vision to contribute to the development of Poland's shipbuilding industry through MRO localization and technology transfer. The joint bidding by the three major defense companies is a strategy to differentiate themselves from European defense contractors by offering integrated land, sea, and air solutions. The European Union (EU) is promoting a "Buy European" policy to encourage the purchase of European-made weapons. As a result, there are concerns that domestic companies may be at a disadvantage in the Orka Project bidding process.
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