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Hanwha, HD Hyundai Heavy Industries jointly bid for $20B Canadian submarine project

Published: 07 May. 2025, 18:41 Updated: 07 May. 2025, 20:29

A Canada Defense and Logistics Joint Committee meeting takes place in Ottawa on March 7, attended by Kang Hwan-seug, vice minister of the Defense Acquisition Program Administration (DAPA), fourth from left, and Judith Bennett, assistant deputy minister at Canada’s Department of National Defence, fifth from left. [DAPA]

Hanwha Ocean and HD Hyundai Heavy Industries have jointly submitted a proposal to Canada for a multibillion-dollar submarine procurement project — marking the first collaborative bid by Korea's rival defense contractors under the so-called “One Team” initiative.

According to Canadian media and industry sources on Wednesday, the two shipbuilders submitted an unsolicited proposal to the Canadian government in early March. The document outlines their offer to deliver four submarines by 2035, at an estimated cost of between $20 billion and $24 billion. The proposal also includes a commitment to build maintenance facilities in Canada and hire local personnel.

An unsolicited proposal differs from a formal request for proposal (RFP) and typically includes preliminary technical details, expected delivery timelines and proposed conditions.

Canada is pursuing the Canadian Patrol Submarine Project (CPSP) to acquire eight to 12 submarines of around 3,000 tons each. The project could be worth up to 60 trillion won ($43.05 billion), although the official bidding process is not expected to begin until sometime next year.

Hanwha Ocean's KSS-III submarine [NEWS1]

The main competitors in the project are expected to include Germany, France, Spain and Sweden.

This proposal marks the first tangible result of mediation efforts by Korea’s Defense Acquisition Program Administration (DAPA), which signed a memorandum of understanding in February with Hanwha Ocean and HD Hyundai Heavy Industries to form a “One Team” for naval exports.

“This is the first time Korean competitors in the defense industry have teamed up for an overseas bid,” a DAPA official said.

The agreement followed a longstanding rivalry between the two shipbuilders, especially over the Korean Next-Generation Destroyer (KDDX) project. The competition turned so bitter that it extended to court battles, with experts citing it as a factor in Korea losing an 11.1 billion Australian dollar ($7.19 billion) contract for Australia’s SEA 5000 project, aiming to acquire 11 frigates, which ultimately went to Germany and Japan.

Industry watchers now wonder whether the unified front shown in the Canadian deal could also carry over to Poland, where the final stages of a submarine procurement race are underway.

The so-called Orka Project seeks three 3,000-ton submarines as well as a long-term maintenance, repair and overhaul contract, with the total value expected to reach 8 trillion won.

Both Hanwha Ocean and HD Hyundai Heavy Industries submitted separate responses to Poland’s request for information in November 2023, and the preferred bidder is expected to be announced within the first half of this year. Germany is currently seen as the front-runner.

Still, Korean industry sources say the two firms are working to present a joint front and highlight their ability to cut delivery times.

“In March, the Korean side submitted an additional proposal to Poland,” one defense industry source said. “It reportedly indicated that by working together, the two companies could shorten the delivery schedule by one to two years.”

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY LEE KEUN-PYUNG, LEE YU-JUNG [[email protected]]