Hanwha eyes $2.3 bn submarine project in Poland

Hanwha Group Vice Chairman Kim Dong-kwan explains to Polish President Andrzej Duda about Hanwha Ocean’s 3,000-ton-class submarine Jang Bogo-III during his visit to the Hanwha Exhibition Hall of Poland’s International Defense Industry Exhibition (MSPO) on Sep. 5 (local). [Courtesy of Hanwha Group]

South Korea’s Hanwha Group is going aggressive to clinch a 3 trillion won ($2.3 billion) worth deal to build up to four new submarines in Poland, with its Vice Chairman Kim Dong-kwan taking the lead in the efforts to export its 3,000-ton-class submarine Jang Bogo-III.

According to multiple sources from the defense industry on Wednesday, major countries including Poland, Canada, the Netherlands, India, Australia, and the Philippines are planning to bring in new submarines. Of them, Hanwha Group has targeted Poland as the first export destination of its 3,000-ton-class submarine Jang Bogo-III, which is a core asset of Hanwha Ocean Co.’s defense business.

Hanwha Group Vice Chairman Kim met with Polish President Andrzej Duda on Tuesday, local time, at the company’s exhibition pavilion for the International Defense Industry Exhibition (MSPO) being held in Kielce, Poland.

He provided details on the submarine’s underwater capabilities and firepower to the Polish president, according to the conglomerate.

The move is understood to be aimed at the replacement projects of major countries for medium-sized submarines (2,000-3,000 tons), which are estimated to be worth around 70 trillion won over the next few years.

Poland, in particular, plans to introduce 3 to 4 new 3,000-ton submarines, which is estimated to be worth around 3 trillion won.

Eleven companies from around the world, including Hanwha Ocean and HD Hyundai Heavy Industries Co., have reportedly participated in the preliminary bid for the Polish project, which is named Orka in Polish, meaning killer whale.

For this project, Poland set demanding conditions, including a submerged depth of more than 200 meters, operational capability for more than 30 days, armed with torpedoes, missiles, and mines, as well as the ability to strike ground, sea, and underwater targets, special operations support capability, and technology transfer.

At the exhibition, Kim briefed Duda on the technical capabilities and firepower of Hanwha Ocean’s submarine, emphasizing that it meets Poland’s requirements.

Jang Bogo-III is a hybrid diesel submarine that increases its submerged time by more than three times compared to conventional lead-acid battery submarines by applying air-independent propulsion and lithium-ion batteries. Kim’s move is also seen as aimed at Canada’s new submarine project, which is expected to be officially bid in the next two to three years.

Canada plans to replace the aging Victoria-class 2,455-ton diesel submarines with 12 new 3,000-ton submarines, a large-scale project estimated to be worth 60 trillion won, including maintenance, repair, and operations (MRO) requirements.

India is also currently pursuing a 7 trillion won project to introduce six diesel submarines.

The 3,000-ton class submarine is an expensive maritime power with a price tag of up to 2 trillion won, depending on add-ons. Given that liquefied natural gas (LNG) carriers, the current flagship of the Korean shipbuilding industry, cost in the mid-to-high 300 billion won per vessel, this is a huge value-added area.

Korean shipbuilders have secured their capacity to build 3,000-ton ships through orders from the Korean Navy.

Previously, they built only small submarines of 1,200-1,800 tons, but now they have the capacity to build medium-sized submarines as well. In the first phase of the Korean Navy’s 3,000-ton submarine introduction project, Hanwha Ocean secured 2 out of 3 ships, while HD Hyundai Heavy Industries secured one, with Hanwha Ocean completing deliveries between 2021 and 2023.

In the second phase, the two ships put up for bidding were both won by Hanwha Ocean and are currently under construction.

However, there are concerns that Korean shipbuilders may be at a disadvantage in future bids around the world as they have no track record of exporting 3,000 ton-class submarines.