Korean shipbuilding rivals unite for Poland's W8tr submarine bid
HD Hyundai Heavy Industries and Hanwha Ocean, maritime-to-defense competitors, are forming an alliance to win Poland's 8 trillion won ($5.8 billion) worth submarine bid, aiming to resolve their decades-long rivalry to boost global exports.
According to industry sources Wednesday, the two companies are seeking to land Poland's Orka Project by presenting themselves as a South Korean consortium, marking their first partnership in pursuing a large-scale export contract.
The project includes construction and maintenance, repair and operations (MRO) of three 3,600 metric ton submarines for the Polish Navy. While project details remain undisclosed, industry insiders anticipate that Poland will select a preferred bidder by the second quarter and make a final decision by September.
Although HD Hyundai and Hanwha had already submitted separate proposals in November 2023 before allying this year, industry insiders suggest that the Polish government might view their unified effort, which combines the strengths of both companies, as enhancing technological competitiveness.
'HD Hyundai Heavy Industries and Hanwha had proposed 2,300-ton and 3,000-ton vessels, respectively, to Poland. This dual approach can address the various needs of the Polish government, increasing the likelihood of Korea securing the contract on a national level,' said a source on condition of anonymity.
In February, HD Hyundai and Hanwha signed a memorandum of understanding to establish a joint team with the state-run Defense Acquisition Program Administration for ship export projects. Under this agreement, HD Hyundai will lead surface ship export initiatives, while Hanwha will focus on submarine exports, with each company supporting the other.
In the following month, they submitted a proposal to secure a 20 billion won Canadian submarine project.
The rival shipyards' belated partnership comes after Korea's unsuccessful bid for Australia's new frigate project last year. HD Hyundai and Hanwha pursued the project separately, only to lose to unified teams from Japan and Germany. DAPA reportedly mediated the ongoing feud between the two companies over the 8 trillion won next-generation Korean destroyer (KDDX) bid, urging collaboration to increase their chances of landing global export bids.
Despite the Korean government's efforts, the shipbuilders maintain their competitive standoff on the Korean Navy's advanced warship development project.
HD Hyundai, the primary contractor selected by DAPA for the basic design of the KDDX in 2020, faced a setback when Hanwha filed a police complaint in March, alleging that HD Hyundai executives were involved in leaking Hanwha's confidential materials related to the KDDX bid. In November, Hanwha withdrew the complaint, citing 'mutual support and cooperation' for the country's shipbuilding industry.
However, the company did not retract its application for the Ministry of Trade, Industry and Energy's KDDX contractor designation process this year. While DAPA oversees the project, the industry ministry is in charge of officially designating the contractor. DAPA postponed the selection process multiple times, from April until after the presidential election.
'Although collaborating as a joint team for global exports is a reasonable strategy for both companies, with growing maritime security threats from North Korea, it is vital for the government to prioritize the rapid deployment of advanced warships like the KDDX,' the source said.
'The industry calls for swift and decisive action to achieve the fastest possible operations of those ships.'
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Korea Herald
2 hours ago
- Korea Herald
BOK chief backs need for won-based stablecoin, warns of FX risks
Central bank notes price growth slowing, but pandemic-era surges still weigh on consumers Bank of Korea Gov. Rhee Chang-yong said Wednesday that he is not opposed to the issuance of a Korean won-pegged stablecoin and, in fact, sees a need for it. When asked whether the issuance of a won-based stablecoin could trigger inflation by increasing the money supply, Rhee clarified his position. 'I do see the need for a won-backed stablecoin. Let me be clear — I am not against it,' he said during a press conference held at the central bank's headquarters. He added that the impact of such a stablecoin on the monetary system would depend on the form of issuance and the type of assets backing it. However, Rhee raised concerns over potential challenges to foreign exchange controls. 'If a won-based stablecoin is issued, it could facilitate the conversion of won-denominated assets into dollar-based stablecoins, which could increase demand for foreign stablecoins and complicate forex management,' he said. The ruling Democratic Party of Korea has been pushing to allow non-banking institutions to issue a won-based stablecoin. 'We would need to consider the broader implications for bank profitability and structural changes if payment and settlement functions — traditionally handled by banks — are expanded to the non-banking sector," Rhee said. He added that the central bank would work with the Ministry of Economy and Finance and the Financial Services Commission to establish appropriate measures as soon as possible. Wednesday's press conference was also held to review the current inflation trend in Korea. In the first five months of 2025, consumer prices rose 2.1 percent — slightly higher than the 1.8 percent increase seen in the last six months of 2024, but still near the central bank's target of 2 percent. 'The pace of growth has stabilized, but prices remain elevated due to the sharp rise that occurred during the COVID-19 pandemic,' Rhee said. From 2021 to May 2025, overall consumer prices increased by 15.9 percent. Meanwhile, the cost of living index — which includes a selected subset of essential items — rose 19.1 percent during the same period, outpacing general inflation by 3.2 percentage points and highlighting rising household burdens. The Bank of Korea also commented on the potential inflationary impact of recent US tariff measures. The central bank noted that the tariffs could actually help ease inflationary pressure in Korea, given its heavy reliance on exports to both the US and China. The logic: weaker global demand could lead to lower raw material prices. Additionally, if China redirects its low-cost goods to markets like Korea due to reduced exports to the US, it could create further deflationary pressure. However, the BOK emphasized the uncertainty surrounding these projections. 'Since the implementation and scope of tariffs could vary depending on negotiation outcomes, factors such as won depreciation or partial supply chain disruptions could offset any downward pressure on prices,' the central bank said in a statement.
Korea Herald
3 hours ago
- Korea Herald
Seoul shares up for 3rd day on top-cap, IT gains
South Korean stocks closed higher for the third consecutive session Wednesday, led by big gains in market heavyweight Samsung Electronics and IT shares. The local currency was trading lower against the US dollar. The benchmark Korea Composite Stock Price Index added 21.89 points, or 0.74 percent, to end at 2,972.19. Trade volume was moderate at 568.6 million shares worth 14.4 trillion won ($10.5 billion), with losers outnumbering winners 457 to 425. Foreigners net purchased 272 billion won worth of local shares, and institutions bought 130.6 billion won, while retail investors unloaded 432 billion won in apparent profit taking. Investors' eyes are on whether the KOSPI will hit the 3,000 mark for the first time in over three years this week despite the growing tensions in the Middle East. Overnight, Wall Street lost ground on news reports that US President Donald Trump has called for Iran's "unconditional surrender" and warned people in Tehran to evacuate immediately, suggesting a possible escalation of tensions in the region. Iran has been engaging in a military conflict with Israel after the latter conducted preemptive airstrikes on Iranian nuclear facilities earlier this week. Experts said foreign investors moved to buy IT shares on the Korean government's plan to make a massive investment in artificial intelligence (AI), while global investment bank JP Morgan recommended overweight of top search engine Naver in stock portfolio. On Sunday, President Lee Jae Myung appointed Ha Jung-woo, head of the Future AI Center at Naver, as the presidential secretary for AI policy, a newly minted position. Naver shot up 17.92 percent to 243,500 won, while Kakao, the operator of the country's dominant mobile messenger, jumped 6.56 percent to 55,200 won. NHN, a major IT and game company, also rallied 10.46 percent to 32,200 won. Tech behemoth Samsung Electronics climbed 2.93 percent to 59,800 won, and leading nuclear power plant manufacturer Doosan Enerbility advanced 2.69 percent to 61,000 won. Major oil refinery SK Innovation soared 10.98 percent to 101,100 won as the Israel-Iran conflict drove up international oil prices. On the other hand, chipmaking giant SK hynix lost 1 percent to 246,500 won, while defense industry leader Hanwha Aerospace dropped 2.83 percent to 927,000 won. The local currency was quoted at 1,369.4 won against the greenback at 3:30 p.m., down 6.7 won from the previous session. (Yonhap)
Korea Herald
4 hours ago
- Korea Herald
S. Korea to launch advisory committee for arms exports
South Korea is preparing to launch an advisory committee under the state arms procurement agency, consisting mostly of non-governmental experts, to boost its defense technology exports, sources close to the matter said Wednesday. The Defense Acquisition Program Administration recently came up with the plan and is "preparing to launch the committee,' a DAPA official told The Korea Herald via phone. 'The review and nomination of candidates will kick off in September.' The committee will consist of 15 members who are considered experts in arms exports. Each member will serve for two years and may be nominated for an additional two-year term. The committee members will be tasked with drafting strategies for the country's arms exports by cooperating with various teams within DAPA currently handling outbound shipments to continents including Europe, Africa, the Middle East, North America and more. The latest plan follows President Lee Jae Myung's campaign pledge to buoy the defense industry, making it one of the country's top four future sectors alongside semiconductor, secondary batteries and automobile. As part of his pledge, Lee said he plans to regularly preside over defense export promotion and strategy meetings, which usually involve Army officials from the Office of National Security. South Korea would become one of the world's top four arms exporters, Lee said. South Korea's arms exports fell to $9.5 billion last year after hitting a record high of $17.3 billion in 2022 and sliding to $13.5 billion in 2023. Separate government sources said last week that South Korea is likely to sign a deal worth some $6 billion to export additional K2 tanks to Poland later this month. If materialized, it would be Seoul's biggest single arms export contract to date. Under the deal set to be signed in late June, Poland would receive 180 K2 tanks, of which 117 units will be produced by South Korean defense contractor Hyundai Rotem Co. The rest will be manufactured locally by Warsaw's state-owned PGZ.
