A composite image shows a frigate built by HD Hyundai Heavy Industries, left, and a submarine built by Hanwha Ocean. The image was generated using artificial intelligence. Photo by Asia Today
July 23 (Asia Today) — South Korea’s two leading naval shipbuilders are pursuing separate surface ship and submarine opportunities as Saudi Arabia considers a major naval modernization program estimated at 8 trillion won, or about $5.4 billion.
HD Hyundai Heavy Industries is expected to focus on a proposed frigate program while Hanwha Ocean concentrates on potential submarine orders, according to South Korean shipbuilding industry officials.
The arrangement could allow the companies to avoid competing against each other and instead direct their resources toward European defense contractors seeking the same Saudi contracts.
Industry officials say Saudi Arabia is considering the acquisition of five frigates and four to six submarines. The frigate portion is estimated at about 3 trillion won, or $2 billion, while the submarine program could be worth approximately 5 trillion won, or $3.4 billion.
The acquisition plans, costs and schedule have not been formally confirmed by the Saudi government and could change as procurement discussions proceed.
Korean companies pursue separate specialties
The potential division of roles follows an agreement promoted by South Korea’s Defense Acquisition Program Administration to strengthen cooperation among domestic companies pursuing overseas warship contracts.
Under the industry arrangement, HD Hyundai Heavy Industries would primarily pursue surface combatant opportunities while Hanwha Ocean would emphasize submarines.
The agreement is intended to reduce costly competition between South Korean companies and improve their ability to compete against foreign shipbuilders.
HD Hyundai Heavy Industries displayed its HDF-6000 export frigate at the World Defense Show in Riyadh in February. The company said the vessel was designed specifically to address requirements in the Saudi defense market.
Hanwha Ocean has indicated that it does not plan to participate in the Saudi surface ship program, increasing the likelihood that the two companies will pursue different parts of the modernization effort.
The Korean companies would face strong competition from established European naval contractors.
Germany’s Thyssenkrupp Marine Systems is considered a potential competitor in the submarine sector. The German company previously competed with Hanwha Ocean in Canada’s next-generation submarine procurement program.
French and Spanish shipbuilders could also compete for Saudi surface ship and submarine orders as Riyadh continues modernizing its naval forces.
Localization could determine the winner
Ship performance and price are not expected to be the only factors in Saudi Arabia’s decision.
Local production, technology transfers, supply chain development and workforce training are likely to play central roles in the competition.
Saudi Arabia’s Vision 2030 development program calls for more than 50% of government spending on military equipment and services to be localized by 2030.
Foreign companies seeking Saudi defense contracts are therefore expected to demonstrate how they would manufacture, maintain and support equipment inside the kingdom.
HD Hyundai Heavy Industries is expanding cooperation with Makeen, a Saudi-based marine engine joint venture.
Makeen was established at the King Salman International Complex for Maritime Industries and Services through investment by HD Korea Shipbuilding & Offshore Engineering, Saudi Aramco Development Co. and other partners.
HD Hyundai Heavy Industries has expanded its shipbuilding and engine cooperation with the venture to include naval projects.
The company is expected to use the partnership to propose localized engine production and a Saudi supply network for its frigate offering.
Hanwha develops submarine supply network
Hanwha Ocean is developing submarine products and services tailored to requirements in Saudi Arabia and the broader Middle East.
The company signed an agreement with Kolon Spaceworks during the World Defense Show to cooperate in pursuing submarine business in Saudi Arabia and other Middle Eastern markets.
Kolon Spaceworks has supplied composite material components for South Korean submarine programs, including the Jang Bogo and Dosan Ahn Chang-ho classes.
Hanwha Ocean has also formed partnerships with other South Korean suppliers to strengthen its submarine technology and establish a supply network capable of supporting overseas production and maintenance.
Industry officials said the division of responsibilities could improve South Korea’s chances of winning Saudi contracts.
“HD Hyundai Heavy Industries and Hanwha Ocean have world-class capabilities in surface ships and submarines, respectively,” an industry official said.
“Concentrating their capabilities on overseas competitors instead of competing against each other could increase the likelihood of success,” the official said.
The Saudi procurement effort is expected to serve as a major test of whether South Korea’s shipbuilders can develop a cooperative export model for large international defense contracts.
— Reported by Asia Today; translated by UPI
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Original Korean report: https://www.asiatoday.co.kr/kn/view.php?key=20260723010008608
