South Korean shipyard Hanwha Ocean announced that it has won its first maintenance contract from the U.S. Navy as it looks to expand its role in the global naval market. Hanwha Group highlights that the former Daewoo Shipbuilding & Marine Engineering acquired in 2023 built destroyers and it looks to leverage this expertise into the worldwide maintenance and repair market which it values at $60 billion annually.
The first project will involve the overhaul and regular maintenance of an unspecified 40,000-ton U.S. Navy logistics support ship. Hanwha Ocean said it will involve work both in its dry dock at the plant in Geoje, South Korea, as well as onshore maintenance. No timing or value was announced for the project, but they are promoting it as the first domestic naval repair contract for a South Korean shipbuilder.
The win comes just a month after Hanwha Ocean received certification and entered into a Master Ship Repair Agreement for the U.S. Navy. The company highlighted that it was able to complete the certification process in just seven months and that it was now entitled to bid for maintenance, repair, and overhaul work for the next five years. Hanwha Ocean entered the program just weeks after its rival HD Hyundai also received certification.
The U.S. Navy has been awarding overseas maintenance contracts as part of the U.S.’s larger diplomatic efforts. India, for example, undertook its first repair project for a U.S. MSC vessel in 2022 and now three Indian shipyards are certified for maintenance projects.
Hanwha Ocean says this maintenance project is a pilot project for the U.S. Navy to further expand its maintenance and repair efforts in Asia. The company sets the value of the U.S. portion of the market at $15 billion annually.
The company reports the order was achieved with the active support of the Ministry of National Defense and the Defense Acquisition Program Administration. They said it is considered a result of close defense industry cooperation between Korea and the U.S.
Since the acquisition of DSME, Hanwha has been moving to expand its role in naval shipbuilding. The company earlier this year also agreed to acquire Philly Shipyard in the United States. Recently, management from Hanwha Ocean met with members of the U.S. Senate’s Armed Services Committee and the U.S. Ambassador to Korea to discuss the naval shipbuilding and maintenance opportunities. They discussed the pending issues and sought Senate support to expedite the approval process required to build ships at Philly Shipyard. The shipyard is currently undertaking work for the U.S. Maritime Administration and Matson and other commercial companies.
U.S. Navy Secretary Carlos Del Toro had visited the South Korean shipbuilders earlier this year. He has encouraged the companies to take a more active role in the U.S. shipbuilding sector and to make investments. He also recently visited with shipbuilders in Europe as part of his Maritime Statecraft initiative designed to bolster the sagging capabilities and capacity in the U.S. industry.
