Hanwha Group’s bold move to acquire Philly Shipyard in the U.S. for $100 million (approx. 143.1 billion won) is off to a rocky start as the facility continues to post significant losses, reports ChosunBiz.
According to industry sources, the shipyard recorded an operating loss of 29.2 billion won in Q2 (April–June), widening from the 2 billion won deficit in the first quarter. These mounting losses have impacted Hanwha System’s overall performance, slashing its second-quarter operating profit by 58% year-on-year to 33.5 billion won. The profit margin also dropped to 4.4%, down from 12.3% the year prior.
Hanwha System attributed the sharp decline to previously unaccounted costs related to the Philly Shipyard acquisition. With the yard having posted losses every year since 2018, analysts expect profitability to remain elusive in the short term. Still, the company continues to pour investments into reviving the aging shipyard, aiming for long-term operational and strategic gains.
Productivity Push and Future Ambitions
Despite the current losses, Hanwha is aggressively pursuing productivity enhancements and facility modernization. It has cut down ship block assembly times and is repurposing idle areas under the iconic 60-meter-tall Goliath crane into usable assembly space. To bridge the workforce gap, Hanwha plans to train 200 personnel annually through a dedicated academy at Philly Shipyard, with ambitions to more than double the current headcount of 1,500 production workers.
These efforts are already showing early results. The launch of a Subsea Rock Installation Vessel (SRIV), originally slated for December, was brought forward by five months—demonstrating improved operational efficiency. Additionally, the elimination of legacy low-margin contracts could accelerate financial recovery in the coming quarters.
Strategic U.S. Presence with LNG and NSMV Builds
Hanwha views Philly Shipyard as a strategic foothold in the U.S. shipbuilding market. It is the first instance of a Korean shipbuilder acquiring a U.S. shipyard, marking a significant milestone in bilateral industrial cooperation. The yard is currently involved in building the National Security Multi-Mission Vessel (NSMV) and will also take part in a new project: constructing a liquefied natural gas (LNG) carrier in collaboration with Hanwha Ocean’s Geoje Shipyard in Korea.
While Philly Shipyard is not yet equipped for full LNG vessel construction, this hybrid production model allows Hanwha to meet the Jones Act requirements that mandate U.S.-built and U.S.-flagged vessels for domestic waters. With plans to raise Philly’s production capacity from the current 1–1.5 vessels a year to over 10 annually within a decade, Hanwha is betting big on its transpacific expansion strategy.
Though challenges remain, the group’s investments reflect a long-term vision to transform Philly Shipyard into a powerhouse of U.S. commercial shipbuilding.
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Source: ChosunBiz
