The Jang Yeong-sil, the lead ship of the 3,600-ton next-generation Jangbogo-III Batch-II submarine built by Hanwha Ocean/Navy
Hanwha Ocean (042660.KS) came up short in Canada’s next-generation submarine program (CPSP), worth up to 60 trillion won, but proved its competitiveness in the global defense market by staying neck-and-neck with Germany until the final stage.
Canadian Prime Minister Mark Carney announced Thursday that Germany’s ThyssenKrupp Marine Systems (TKMS) had been selected as the preferred bidder for the CPSP. Canada cited that TKMS’s submarine is optimized for Arctic waters and offers full interoperability with the North Atlantic Treaty Organization (NATO). If negotiations with TKMS fail, Hanwha Ocean would take over the preferred bidder status.
Although it did not win the Canadian government’s final selection, the prevailing assessment is that the bid served as an opportunity to confirm Hanwha Ocean’s competitiveness. The company beat major European defense firms from France, Spain and Sweden and battled Germany’s TKMS, a submarine powerhouse, to the very end, demonstrating the strength of Korea’s defense industry.
Indeed, Carney stressed that day that “both TKMS and Hanwha Ocean met the high performance standards required by the Canadian Navy,” calling it “a difficult decision made after agonizing until the last moment between two companies with outstanding capabilities.”
Some analysts also say this experience will serve as a strong reference for Hanwha Ocean in future submarine bids in other countries. Lee Dong-han, research fellow at Shinhan Investment & Securities, noted that “Hanwha Ocean pushed the contest into an extremely close race by leveraging a proven platform, early delivery and partnerships with local companies,” adding, “It lost the contract, but it was a process of winning the market.”
Lee particularly forecast that this experience would serve as a valuable asset in follow-up exports to Poland, the Middle East and Southeast Asia, as well as in maintenance, repair and overhaul (MRO) cooperation in North America.
President Lee Jae-myung also offered encouragement on Facebook, writing, “I am confident that today’s experience will be a valuable foundation for further advancing our technology and raising our competitiveness even higher.” In a statement, Hanwha Ocean said, “We will closely analyze the challenges identified through this bidding competition, devise clear alternatives, and are determined to find a path for ‘K-maritime defense’ to make an even greater leap in the global market.”