HD Hyundai Heavy Industries signs deal to bid on U.S. Navy projects

Industry

Published: 11 Jul. 2024, 13:36 Updated: 11 Jul. 2024, 16:43

HD Hyundai Heavy Industries signs deal to bid on U.S. Navy projects

The King Jeongjo the Great destroyer, which HD Hyundai Heavy Industries built as the country's first next-generation Aegis destroyer, will be delivered to the Korean navy by the end of this year. [HD HYUNDAI HEAVY INDUSTRIES]

HD Hyundai Heavy Industries (HD HHI), a subsidiary of HD Korea Shipbuilding & Offshore Engineering, signed a Master Ship Repair Agreement (MSRA) with the U.S. Navy, marking its entry into the lucrative U.S. naval maintenance sector.

The agreement grants HD HHI qualification to bid on maintenance, repair and overhaul (MRO) projects for ships under the Military Sealift Command and combat vessels operated by the U.S. Navy for the next five years.

The company announced Thursday that it had become the first Korean shipbuilder to ink such a deal with Naval Supply Systems Command of the U.S. Navy since submitting its application in May 2023. It completed facility and quality inspections in January and concluded security and financial audits in March and May.

Under the deal, the Korean shipbuilder is entering the U.S. MRO market, which is the world's largest and contributes 20 trillion won ($14.5 billion) annually, according to British military intelligence firm Janes.

The company is eyeing further expansion into the market through the agreement, hoping to secure additional construction projects for naval ships, special purpose vessels and those ordered by the U.S. government.

The Korean shipbuilder established a logistics support center at the Subic yard in 2022 to provide MRO support to the Philippine Navy.

“By leveraging our unrivaled expertise in building 18 exported naval ships and the MRO busiqness know-how accumulated in the Philippines, we will smoothly enter the U.S. naval MRO market and further expand the horizons of K-Naval export,” said Joo Won-ho, head of HD HHI's naval and special ship business unit, in a statement.

In February, HD HHI executives also met with the U.S. Secretary of the Navy Carlos Del Toro to discuss cooperation during his visit to the company’s Ulsan headquarters.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]