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“Seize the 70 trillion market”… Hanwha Ocean aims for global submarine business.

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The Jangbogo-I class submarine constructed by Hanwha Ocean. / Photo=Hanwha Ocean

Hanwha Ocean is accelerating its submarine business, eyeing the global marine defense market as a new source of revenue. As the world’s eighth company to independently develop a 3,000-ton class submarine, Hanwha Ocean boasts top-tier submarine technology. It is considered to have sufficient competitiveness in the global submarine market, estimated to be worth tens of trillions of won.

According to the global investment industry on the 20th, the world’s submarine and surface ship market is projected to reach $243 billion (approximately 325 trillion won) over the next decade. Among them, submarine orders are expected to be around 70 trillion won, including 60 trillion won (8~12 units) in Canada, 5 trillion won (2~3 units) in Poland, and 3 trillion won (2 units) in the Philippines. Compared to the usual LNG ship, which costs around 300 billion won per unit, it is a business with a very high added value.

Hanwha Ocean is also actively jumping into the bidding war. It has submitted an application to participate in the Polish submarine project. It is also actively pursuing submarine projects in the Philippines and Canada and is expected to engage in fierce competition with global major manufacturers.

Hanwha Ocean is confident of victory in the competition. This is because it has solidly built up technical skills and order experience in the submarine field over the past 40 years. It has also set several “first” records.

The Jangbogo-III Batch-II submarine under construction by Hanwha Ocean. / Photo=Hanwha Ocean

In 1987, Hanwha Ocean received its first order for a 1,200-ton class (German 209 class) submarine, the “Jangbogo,” from the Republic of Korea Navy. Although it had no experience in submarine construction at the time, it managed to transfer technology from the German HDW shipyard. Despite HDW’s reluctance to transfer technology, Hanwha Ocean’s employees learned the process over the shoulder and spent their evenings reverse-engineering the process into blueprints, investing efforts in indigenizing the technology.

These efforts laid the foundation for Hanwha Ocean to leap to the only shipyard that has built all types of submarines owned by Korea, including the 1,200-ton class Jangbogo-I (209 class), the 1,800-ton class Jangbogo-II (German 214 class), and the 3,000-ton class Jangbogo-III new submarine. Only seven countries, including the United States, Britain, France, Japan, India, Russia, and China, have independently developed medium-sized submarines of 3,000 tons or more with their own technology, but with Hanwha Ocean’s independent development, Korea also made its name as the eighth country.

The 3,000-ton Jangbogo-III class submarine boasts the best armament and submerged duration among submarines, excluding nuclear-powered submarines, and achieves an indigenization rate of 80%.

On September 6, Kim Dong-kwan, vice chairman of Hanwha Group, is explaining Hanwha Ocean’s Jangbogo submarine to Polish President Andrzej Duda at the Hanwha booth at the MSPO, an international defense industry exhibition in Poland. /Photo=Hanwha Ocean

Hanwha Ocean has ordered a total of 22 submarines so far, including six submarines exported to Indonesia for the first time in Korea. Among the countries that introduced submarine technology, Hanwha Ocean is the only one that has actually exported submarines. It plans to concentrate its capabilities to ensure that submarine projects ordered worldwide lead to order achievements in the future.

Vice Chairman Kim Dong-kwan of Hanwha Group is also actively backing Hanwha Ocean by personally going on sales. Vice Chairman Kim met with Polish President Andrzej Duda, who visited the Hanwha booth at the MSPO, an international defense industry exhibition held in Poland last September, and explained the strengths and technical skills of Hanwha Ocean’s submarine and customized solutions tailored to the Polish region.

Moon Geun-sik, a special professor at the Graduate School of Public Policy at Hanyang University, evaluated, “Submarines are the most economical and destructive strategic weapons for countries with small to medium-sized navies to compete with great powers.” He added, “Hanwha Ocean has enough potential to succeed in additional submarine exports in terms of performance and delivery. If there is support for trade negotiations and export finance across the government, the scale of submarine exports is expected to grow even more.”

A Hanwha Ocean official emphasized, “We plan to set a new milestone in the history of overseas submarine exports by forming a team with more than 200 parts partner companies that have achieved an indigenization rate of 80% with the 3,000-ton class Jangbogo-III submarine.”

CP-2022-0013@fastviewkorea.com

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