Hanwha-HD Hyundai rivalry shifts to US warship maintenance

Following HD Hyundai’s signing, Hanwha inks master ship repair agreement with US Naval Supply Systems Command

FFX Batch-II Frigate built by Hanwha Ocean (Hanwha Ocean)

The competition between Korean conglomerates Hanwha and HD Hyundai to expand their work with the US Navy has heated up as both secured key certification for maintenance and repair projects this month.

Hanwha Ocean, which was known as Daewoo Shipbuilding and Marine Engineering before Hanwha Group’s acquisition last year, said Monday that it had signed a master ship repair agreement (MSRA) with the US Naval Supply Systems Command to secure the right to bid for maintenance, repair and operations (MRO) projects for the next five years.

Hanwha Ocean said the agreement recognizes its technological and maintenance capabilities and has solidified the shipbuilder’s footing in the global defense industry.

“Hanwha Ocean will accelerate the expansion into the global defense market based on technological innovation and quality improvement,” said a Hanwha Ocean official.

Hanwha Ocean said it had applied for MSRA certification in January and underwent on-site inspections of its Geojae shipyard in South Gyeongsang Province in April, despite the process usually taking more than a year.

Hanwha Ocean's Geoje shipyard in South Gyeongsang Province (Hanwha Ocean)

Hanwha Ocean plans to use the Philadelphia-based Philly Shipyard in the US, which it had acquired jointly with the conglomerate’s defense subsidiary Hanwha Systems for $100 million last month.

Hanwha’s announcement came 11 days after HD Hyundai Heavy Industries became the first Korean shipbuilder to sign an MSRA with the US Naval Supply Systems Command on July 11.

HD HHI was also given a five-year term to take part in bids.

Joo Won-ho, head of the Special Ship Business unit at HD HHI, said, "Based on our unique technology to build a total of 18 warships that have been exported and MRO-related know-how accumulated in the Philippines, we will further expand the horizon of Korean warship exports by making a soft landing in the US warship ship MRO market.”

HD HHI said it applied for the agreement in May last year and underwent three on-site inspections by US officials in January, March, and May this year.

By Kan Hyeong-woo(hwkan@heraldcorp.com)