HD Hyundai Heavy seals $463 million warship deal with Peru

Industry

Published: 17 Apr. 2024, 17:35 Updated: 17 Apr. 2024, 18:17

HD Hyundai Heavy seals $463 million warship deal with Peru

Officials, including senior executive vice president of HD Hyundai Heavy Industries' Naval & Special Ship Business Unit Joo Won-ho (far right), Ambassador of Korea to Peru Choi Jong-uk (second from right) and Peruvian president Dina Boluarte (center) pose for a photo at a signing ceremony for joint construction of vessels for the Peruvian navy at Centro Naval de San Borja in Lima, Tuesday. [HD HYUNDAI]

HD Hyundai Heavy Industries sealed a 640.6 billion won ($463 million) contract to jointly construct four warships with the Peruvian state-owned shipyard Servicios Industriales de la Marina (SIMA Peru).

The contract comes three weeks after HD Hyundai Heavy was selected as the preferred bidder in late March.

The warships to be built include a 3,400-ton frigate, a 2,200-ton deepwater guard vessel and two 1,500-ton landing ships, according to the Korean shipbuilder on Wednesday.

HD Hyundai Heavy wins $463 million contract with Peru for warships

While the Korean firm will be in charge of the ship design, tools, materials and technical support, the SIMA shipyard will be responsible for the final construction stages. The vessels are scheduled to be delivered sequentially to the Peruvian navy by 2030, one year later than initially planned.

"The contract period was extended as negotiations continued until the final moments," an HD Hyundai Heavy spokesperson said.

With the definitive agreement signed, the Korean company emerged as a "strategic partner" with the Peruvian navy for the next 15 years, positioning itself as the preferred bidder for future procurement projects.

The success of this contract, representing the largest export volume for a Korean shipbuilder to Latin America, is attributed to the concerted efforts of the company and government agencies, HD Hyundai Heavy Industries said.

Competing firms from Italy, Spain and the Netherlands were in the running, with the Korean government providing support from the tender notice stage.

Upon SIMA Peru's tender announcement, the Defense Acquisition Program Administration (DAPA) pledged active government support in a letter under the name of Minister Seok Jong-gun. Additionally, Ambassador of Korea to Peru Choi Jong-uk sent a letter introducing the technological capabilities of Korean ships to the government in Lima as well as the shipyard.

DAPA has formed a task force named "Team Ship," comprising defense-related agencies and shipbuilding companies, to actively support defense exports.

"We will mobilize our advanced technological capabilities and extensive experience to modernize and enhance the combat capabilities of the Peruvian navy," said Joo Won-ho, senior executive vice president of HD Hyundai Heavy Industries' Naval & Special Ship Business Unit. "We will ensure that the SIMA shipyard, which has provided us with the opportunity to collaborate from the other side of the globe, possesses sufficient shipbuilding capacity and establish it as [our] hub for Central and South America."

“We are witnessing a historic milestone today," said Peruvian president Dina Boluarte.

A computer-generated image of HD Hyundai Heavy Industries' 3,400-ton frigate, center, a 2,220-ton deepwater guard vessels, bottom, and 1,400-ton landing ship [HD HYUNDAI]

BY SEO JI-EUN [seo.jieun1@joongang.co.kr]