Hanwha Ocean preps to enter N. American defense market

[Courtesy of Hanwha Ocean]

South Korea’s Hanwha Ocean is set to establish a local subsidiary in the United States in a bid to penetrate the North American defense industry market. The U.S. subsidiary is expected to serve as a strategic foothold for securing stakes in overseas shipyards or potential acquisitions of defense-related enterprises.

According to Hanwha Ocean’s third-quarter report disclosed on Thursday, the company’s board approved the establishment of a subsidiary, ‘Hanwha Ocean U.S. Holding Company,’ at the end of September. The decision to establish Hanwha Ocean’s US subsidiary is seen as a step towards materializing the company’s vision of securing overseas production hubs and expanding its share in specialized vessel projects, such as military ships.

Earlier in August, Hanwha Ocean announced plans for a capital increase, showing aspirations to elevate its revenue from the specialized vessel sector from 850 billion won ($655 million) this year to 2.9 trillion won in the future. As part of this strategy, the company has kept avenues open for securing foreign shipyards or potential stake acquisitions in defense-related firms. Recent reports have highlighted its interest in pursuing the acquisition of the US-based shipyard, Philly Shipyard.

The decision to establish a subsidiary serves as a preparatory step to realize these ambitions. Hanwha Ocean plans to allocate 420 billion won, equivalent to 28 percent of the recently raised 1.49 trillion won through a capital increase, toward securing stakes in global defense business expansions and Maintenance, Repair, and Overhaul (MRO) companies, aiming to bolster its foothold in the industry.

Hanwha Ocean has been actively pursuing entry into the North American market. Notably, during the ‘Deep Blue Forum 2023,’ a submarine-focused forum held in Ottawa, Canada, on Nov. 5, the company inked four memorandums of understanding with four local companies regarding potential collaborations in the Canadian submarine projects.