South Korea’s two major shipbuilding giants, HD Hyundai Heavy Industries and Hanwha Ocean, are partnering as ‘One Team’ in the naval export market.
DAPA Press Release Translated by Naval News
The Defense Acquisition Program Administration (DAPA), Hanwha Ocean, and HD Hyundai Heavy Industries signed a Memorandum of Understanding (MOU) on Tuesday, February 25, to establish a “One Team” for naval ship export projects.
Recently, South Korea’s defense industry has been gaining significant recognition in the global market, and the country is also acknowledged as a leading shipbuilding powerhouse in the naval sector. As maritime security becomes increasingly important worldwide and various nations strive to strengthen their naval forces, it is crucial for South Korea’s high-quality naval vessels to expand into the global market. To achieve this, close communication and collaboration between the government and shipbuilders are essential. In response, DAPA and the nation’s two leading naval shipbuilders have been working to establish a systematic cooperation framework that maximizes government support and synergy through collaboration.
This MOU stipulates that when participating in naval ship export projects, the government and shipbuilding companies will form a “One Team” and focus on their respective strengths. Under this agreement, HD Hyundai Heavy Industries will take the lead in surface vessel export projects, while Hanwha Ocean will oversee submarine export projects, with both companies supporting each other. This approach aims to maximize each company’s strengths while enhancing efficiency through resource allocation and technology sharing. Beyond naval ship export cooperation, this partnership is also expected to drive innovation and growth through ongoing joint development projects.
Furthermore, this MOU is seen as a significant first step in maximizing synergies within the Korean defense industry through constructive competition while allowing the government to concentrate its support more effectively. During the MOU signing process, DAPA actively facilitated smooth communication between the two companies and provided necessary assistance. Both companies, under the shared goal of entering the global naval ship market, prioritized the national interest of South Korea and the promotion of peaceful global maritime security.
“I hope today’s MOU signing lays the foundation for mutual growth within South Korea’s defense industry and serves as a new turning point for greater success on the world stage. The government will fully support the ‘One Team’ initiative to boost K-ship exports and contribute to global maritime security.”
Seok Jong-geon, Minister of Defense Acquisition Program Administration (DAPA)
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Naval News Comment
HD Hyundai Heavy Industries and Hanwha Ocean, which had been engaged in intense domestic competition over the contract for the Korean Destroyer Next Generation (KDDX), separately participated in Australia’s SEA 3000 Future Frigate Program. Meanwhile, shipbuilders from Japan and Germany, which competed as unified national teams, successfully made it to the shortlist. This was a “wake up call” for South Korea’s naval shipbuilding.
Several factors contributed to South Korea’s failure in the bid, including the lack of a unified “One Team Korea” approach with government-backed support and the misalignment of South Korean proposals with the specific needs of the Royal Australian Navy. However, the primary criticism from the general public was the failure of domestic shipbuilders to form a cohesive team for the bid, prompting DAPA to take on a mediating role to prevent excessive competition between companies from jeopardizing key opportunities for South Korea’s defense industry.
With this new MOU, HD Hyundai Heavy Industries and Hanwha Ocean are expected to showcase their strengths by cooperating in surface ship and submarine exports, respectively. Their collaboration is particularly anticipated in upcoming international projects such as Poland’s Orka Program and Canada’s Patrol Submarine Project, where a unified “Korea One Team” approach could enhance competitiveness on the global stage.
