HD Hyundai and Hanwha Ocean Form 'One Team,' Propose Multi-Trillion Won Cooperation Plan in Canadian Submarine Bid

Comprehensive Submarine Consulting,
Technology Transfer and Advanced R&D Collaboration
Active Utilization of Industrial and Technological Benefits (ITB)

In the race to win the Canadian Patrol Submarine Project (CPSP), which is being promoted at a scale of up to 60 trillion won, HD Hyundai has joined forces with Hanwha Ocean as a one-team strategy and has proposed industrial cooperation measures in the shipbuilding and energy sectors worth several trillion won to the Canadian government.

The Shin Chaeho, the third ship of the Jang Bogo-III Batch-I, built by HD Hyundai Heavy Industries and delivered to the Navy in April 2024. Provided by HD Hyundai

This move takes into account the Canadian government's emphasis on Industrial and Technological Benefits (ITB), which requires technology transfer and expanded industrial participation when importing overseas defense equipment. HD Hyundai has prepared a comprehensive industrial cooperation package, lending support to Hanwha Ocean's vision for bilateral cooperation.

On January 27, HD Hyundai announced that it had presented a package deal worth several trillion won that could be used as an ITB proposal for the Canadian submarine project. HD Hyundai Heavy Industries, the core shipbuilding and marine subsidiary of HD Hyundai, has formed a consortium with Hanwha Ocean and is now in final competition with Thyssenkrupp Marine Systems, which is on the CPSP project shortlist.

In this cooperation proposal, HD Hyundai plans to provide comprehensive technical consulting centered on shipbuilding, leveraging its capabilities in submarine depot-level maintenance (the highest level of precision maintenance), so that the Canadian side can operate and maintain submarines stably. In addition, the company intends to transfer technologies and shipbuilding expertise related to naval vessels and submarines to local Canadian shipyards, thereby contributing to strengthening the competitiveness of the local shipbuilding industry.

HD Hyundai will also expand the scope of cooperation in research and development. The company plans to pursue joint research and development (R&D) with major Canadian universities and research institutes, not only in shipbuilding and manufacturing but also in advanced technology fields such as artificial intelligence (AI) and biotechnology, in order to enhance the long-term competitiveness of both countries' industries.

In the energy sector, the proposal includes a plan led by HD Hyundai Oilbank to collaborate with Canadian crude oil producers to import several trillion won worth of crude oil during the submarine project period. However, the specific amount of the package deal has not been disclosed, and the details will be finalized during future negotiations.

An HD Hyundai representative stated, "The Canadian submarine project is not just about exporting naval vessels, but rather the core is ITB across the entire industry, which can create industrial synergy between the two countries. We have proposed a cooperation model in the shipbuilding and energy sectors that will allow both countries to achieve a win-win outcome."

Earlier on the same day, Hanwha Group, through Hanwha Ocean-the main entity for the CPSP project-signed a total of five memorandums of understanding (MOUs) with Algoma Steel, Canada's largest steelmaker. The agreements include building a local steel plant and establishing a steel supply system to be used for submarine construction and maintenance, as well as MRO infrastructure.

This is seen as a concrete example of an industrial cooperation model that meets the Canadian government's emphasis on expanding local industrial participation and ITB, as well as the so-called "Buy Canadian" policy during the bidding process.