- Hanwha Ocean aims to boost its revenue from overseas military vessels to around 4 trillion won ($2.91 billion) by 2030 and hopes to pick up more repair orders from the U.S. Navy.
- The company is investing in South Korea to use existing facilities and expand naval ship capacity to build five submarines and three surface vessels at the same time by 2029, from two submarines and two surface vessels now.
Hanwha Ocean, a South Korean shipbuilder, hopes to increase its revenue from overseas naval vessels to 4 trillion won (2.91 billion dollars) by 2030. It also hopes to receive more repair orders from U.S. Navy, reports Reuters.
After President Donald Trump’s executive order to restore U.S. Shipbuilding, the Asian country was brought into the trade discussions with the U.S. about tariffs.
Hanwha Ocean (formerly Daewoo Shipbuilding) is one of world’s largest shipbuilders with an orderbook of $31.43 Billion as of end March. Last year, it acquired a U.S. Shipyard in Philadelphia to expand its market.
Since last year, the U.S. Navy has placed two orders for its naval ship business to repair and overhaul their ships.
Steve SK Jeong of Hanwha Ocean’s Naval Ship Global Business said, “I believe we are the largest shipyard in the World that has taken these maintenance, repairs and overhaul orders from U.S. Navy.” This was a few days after U.S. Navy Secretary John Phelan had visited the shipyard.
It is not profitable but the experience of working with U.S. Navy will be valuable if we get newbuild orders.
Jeong stated that Hanwha Ocean was hoping to receive a number of maintenance and repair orders from the U.S. Navy in double digits before 2030.
Trump has pledged to spend “a great deal of money” on shipbuilding to restore U.S. capability, citing concern about how his country is falling behind in a field that’s also dominated by China.
Even if foreign shipyards have operations in the United States, U.S. law can still make it difficult for them. The Byrnes-Tollefson amendment of the U.S. Department of Defense Appropriations Act prohibits them from building U.S. Navy ships.
Translation of processes
Hanwha Ocean’s Philadelphia Shipyard wants to obtain a license that will allow it to build U.S. Navy ships. But, Jeong explained, importing automated welding machines is not the same as importing cutting-edge manufacturing techniques honed in competition with South Korean and Chinese Shipyards.
“I don’t think the U.S. Shipbuilding Industry has had to compete much.” Jeong stated that the facilities are outdated and there is a shortage in technicians. “We are looking to upgrade facilities, train workers and introduce our manufacturing process, which can build the same vessel in two thirds or less of the time as a U.S. shipyard.”
Jeong stated that the company will invest in South Korea, using existing facilities to expand naval ship capacities to build five submersibles and three surface ships at the same time. This is from the current two submarines with two surface vessels.
Hanwha Ocean, despite building 17 subs for the South Korean Navy from 1987 onwards, has only actively competed with overseas orders for the past few years due to South Korea’s low-birthrate and shrinking population of military age.
Jeong stated that the company is competing with other companies to export submarines and frigates to Poland, Canada and Thailand, as well as knocking at the doors of markets in the Middle East and South America, North Africa, and Southeast Asia to create a steady flow of orders to bring the foreign sales up to 4 trillion won in 2030.
This would be four times as much revenue as the 1.05 trillion won it generated in 2024.
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Source: Reuters
