Hanwha Ocean becomes Korea’s first shipbuilder to secure U.S. Navy MRO contract

Photo by MK DB

South Korean shipbuilder Hanwha Ocean Co. has secured a maintenance, repair and overhaul (MRO) contract for a 40,000-ton U.S. Navy logistics support vessel, the company announced on Thursday.

Hanwha Ocean is the country’s first shipbuilder to enter the U.S. Navy MRO market.

The U.S. Navy ship will be docked at Hanwha Ocean‘s facility in Geoje, South Gyeongsang Province, for comprehensive maintenance and inspection. Additional onshore maintenance tasks will be conducted using floating facilities within the shipyard.

Hanwha Ocean is the first Korean shipbuilder to secure such a contract. HD Hyundai Heavy Industries Co. also obtained Maintenance, Repair, and Overhaul Agreement (MSRA) qualifications last month but did not bid for the latest project.

Hanwha Ocean signed the MSRA with the U.S. Naval Supply Systems Command last month, a necessary step for U.S. Navy MRO contracts, and secured the deal.

Hanwha Ocean’s ship technology and maintenance infrastructure were reportedly highly regarded by the U.S. Navy. The company expedited the usually year-long certification process to just seven months, boosting its chances of winning the contract.

Through this contract, Hanwha Ocean aims to expand its presence in the U.S. Navy‘s MRO market, worth about 20 trillion won ($15 billion) annually.

The MSRA acquisition has already enabled the company to compete for MRO contracts for vessels of the U.S. Navy’s 7th Fleet, and its recent purchase of the Phillys Shipyard has opened up additional opportunities for contracts on the U.S. mainland. Under the U.S. Jones Act, ships operating domestically in the U.S. must be built in the country, and this rule also applies to the maintenance of naval vessels.

Hanwha Ocean plans to showcase its ship technology and maintenance infrastructure by completing the logistics support ship overhaul project on time.

Since the U.S. Navy awarded this overhaul as a pilot project in the Asia region, maintaining high maintenance quality is crucial for securing future contracts.

A successful performance could also open doors for Hanwha Ocean to enter the MRO market for naval vessels in other countries.

“Entering the U.S. Navy MRO business marks a significant stepping stone for us in the global naval vessel MRO market, estimated to be worth over 80 trillion won annually,” Hanwha Ocean said. “We aim to build trust with the U.S. Navy by delivering high-quality overhauls on time while also securing reasonable profits.”