On November 17, South Korea’s DAPA announced that they visited to four U.S. shipyards (HII, Austal, General Dynamics NASSCO, Norfolk Naval Shipyard) as well as NAVSEA, the largest of the U.S. Navy’s system commands responsible for acquisition and maintenance of U.S. Naval Ships. The South Korean delegation included representatives from HD Hyundai Heavy Industries, Hanwha Ocean, HJ Heavy Industries, and SK Ocean Plant, all of which are esteemed for their proficiency in building naval vessels for the Republic of Korea Navy.
The Korean delegation visited U.S. shipyards known for constructing major naval vessels, such as Huntington Ingalls and Austal, which have built the Arleigh Burke-class destroyers and Independence-class littoral combat ships, respectively. Austal, originally an Australian company, has extended its operations into the U.S. market and is actively involved in U.S. Navy projects. General Dynamics NASSCO and Norfolk Naval Shipyard specialize in the repair and maintenance of naval vessels currently in service.
NAVSEA oversees the complete lifecycle management of naval vessels. This encompasses technical and field management, as well as overall project management responsibilities. NAVSEA is charged with the research, development, construction, integration, and maintenance necessary to procure the ships and combat systems needed by the U.S. Navy.
The site visit was first discussed during the two Korean-U.S. Naval Shipbuilding cooperation Meetings that have been conducted since January of last year. Following these discussions, in September of this year, the Korean delegation of shipbuilders and DAPA were formally invited by the U.S. Navy’s NAVSEA. Amidst the difficulties posed by recent events, such as supply chain of materials and outflow of skilled production manpower the shipbuilding industry has sought to reevaluate and reinforce the current state of cooperation in the naval shipbuilding sector between South Korea and the United States. This situation has brought industry and government representatives from both nations to discuss on a new mutual cooperation to solve challenges and explore opportunities.
After visiting the shipyards, the delegation and DAPA also visited NAVSEA and Naval Surface Warfare Centers (NSWC) to engage in in-depth discussion with U.S. officials to foster defense cooperation in naval shipbuilding and explore Korean participation in U.S. Navy projects. Additionally, concurrent meetings between researchers from Korean Agency for Defense Development (ADD), Defense Agency for Technology and Quality (DTaQ) and U.S. NSWC were held to explore cooperation in advanced technology development and quality improvement for naval ships, including the establishment of manned and unmanned integrated control systems and quality assurance during ship design stages.
Eom Dong-hwan, the head of DAPA stated:
“To overcome the difficulties faced by the shipbuilding industry and to smoothly promote shipbuilding projects, it is necessary to strengthen and expand multilayered cooperation between the two countries.” He further stated, “In the future, we plan to establish a strategic cooperative relationship between the governments and shipbuilding industries of both countries, and based on this, we will actively support domestic shipbuilders in entering the U.S. market through various means such as the U.S. Navy’s ship repair and new ship construction projects.”
South Korea Hanwha Ocean Expands into North American Defense Market with New U.S. Subsidiary
Hanwha Ocean is making a significant move into the North American defense industry market by establishing a local subsidiary, Hanwha Ocean US Holding Company. This move, announced in their third-quarter disclosure, was approved by their board in late September and is supported by a substantial paid-in capital increase of around 1.16 billion USD. With an initial investment of 324.88 million USD, Hanwha Ocean’s strategy involves acquiring shares in overseas shipyards and MRO (Maintenance, Repair, and Overhaul) service companies. This approach is part of their broader plan to triple naval vessel sales by securing a production base in the U.S., thereby positioning themselves to compete for projects such as the Canadian Patrol Submarine Program (CPSP) and to participate in future U.S. Navy projects.
Concurrently, there’s industry speculation suggesting Philly Shipyard as a potential acquisition target for Hanwha Ocean. However, this remains unconfirmed, as both Hanwha Ocean and Philly Shipyard have either declined to comment or stated that no decision has been made regarding this matter. This cautious approach from both companies indicates a sensitive phase of negotiation, which is typical in high-level business dealings within the defense sector.