'60 Trillion Won Canadian Submarine' Key Figure Secretary Fuhr: "Must Provide the Best Economic Opportunities" (Comprehensive)

Visit to Hanwha Ocean's Geoje Plant on February 2
Canada Demands Offset Trade
Request for "Cooperation in the Automotive Sector"

"Ultimately, the key is who can provide the best economic opportunities for Canada."

On February 2, Secretary Fuhr, Secretary of State for Defence Procurement of Canada, who visited Hanwha Ocean's Geoje plant, stated, "We will be building a relationship with the winner for decades to come," emphasizing this point.

As the top official overseeing and coordinating Canada's defense procurement policy, Secretary Fuhr toured the assembly plant at Hanwha Ocean's Geoje site and boarded the Jang Youngsil, showing great interest in the company's technological capabilities.

Stephen Fuhr, Secretary of State for Defence Procurement of Canada (second from left), visited Hanwha Ocean's Geoje plant on the 2nd and received an explanation about the Jangyeongsil, the lead ship of the Jangbogo-III Batch-II proposed for the Canadian submarine project. Hanwha Ocean

Representing the government, Secretary Fuhr is responsible for publicly explaining the strategic necessity of large-scale projects such as the Canadian submarine project, industrial participation, and alliance cooperation messages.

This Canadian submarine project involves the acquisition of up to 12 diesel submarines, each weighing 3,000 tons. The consortium of Hanwha Ocean and HD Hyundai Heavy Industries is in final competition with Germany's Thyssenkrupp Marine Systems (TKMS), and the contract value for the submarines alone could reach up to 20 trillion won. Including operation and maintenance costs over the next 30 years, the total project size is estimated at up to 60 trillion won. If successful, this would mark the largest single export contract in the history of Korea's defense industry.

On this day, Secretary Fuhr toured the facilities with more than 30 Canadian government and corporate representatives. Major Canadian shipyard officials also accompanied the visit. This is interpreted as a reflection of the Canadian government's requirement for offset trade, not just the procurement of submarines. The Canadian government is reportedly demanding offset trade equivalent to 100% of the submarine contract value. Offset trade refers to conditional trade required by the importing country from the exporting country. Specifically, Canada has requested a package that includes the purchase of Canadian-made equipment, local production, technology investment, and cooperation in resources and energy.

Stephen Fuhr, Secretary of State for Defence Procurement of Canada (fifth from the left), visited Hanwha Ocean's Geoje plant on the 2nd and took a commemorative photo after touring the Jang Youngsil, the lead ship of the Jangbogo-III Batch-II proposed for the Canadian submarine project, together with Lee Doohee, Vice Minister of National Defense (seventh from the left), and Kim Heechul, CEO of Hanwha Ocean (sixth from the left). Hanwha Ocean

Secretary Fuhr reiterated that the decision criterion for the Canadian submarine project depends on what kind of economic value it brings to Canada. He said, "Canada is currently in a situation where it needs to restructure its economic framework," adding, "Jobs and economic opportunities are extremely important." He further stated, "Canada welcomes foreign direct investment," and added, "We hope Canadian companies and workers can participate together, and we encourage investment from overseas companies."

Previously, on January 26, Hanwha Ocean and Hanwha Systems signed memorandums of understanding for strategic investment and cooperation with five Canadian companies in the steel, artificial intelligence (AI), and space sectors to win the CPSP project. In addition, Hanwha Ocean has signed more than ten MOUs with Canadian companies, supporting the Canadian government's 'Buy Canadian' policy.

The Canadian government is reported to have required both Korea and Germany, the final bidders, to build vehicles domestically as a condition for awarding the contract. Secretary Fuhr requested investment in the automotive sector on this day. He said, "Both Korea and Germany are automobile manufacturing countries," and emphasized, "If there is potential for cooperation in this field, we want to expand into broader economic cooperation beyond defense. This would be a much larger project than the submarine program."

On the same day, Secretary Fuhr also visited the Jinhae Naval Submarine Command to review the Navy's education and training system, as well as submarine maintenance and repair facilities. At the Changwon Hyundai Rotem plant, he toured the K2 tank production facilities. On February 4, he is scheduled to visit the HD Hyundai Global R&D Center in Seongnam, Gyeonggi Province.