Hanwha Systems wins first Navy maintenance contract, anticipates growth in U.S. market

South Korean shipbuilder Hanwha Systems has secured a U.S. Navy contract for maintenance work on a logistics support ship, according to a company announcement, which presents the award as a leap forward in Hanwha's effort to enter the American Navy’s market for maintenance, repair and overhaul work.

Under the award, the 40,000-ton logistics support ship will undergo inspection and maintenance at Hanwha’s Geoje shipyard, located near the southern end of South Korea. The contract is the first of its kind awarded to a South Korean shipbuilder.

According to the announcement, the company signed a Ship Maintenance Restructuring Agreement (MSRA) with Naval Supply Systems Command in July, certifying the company to work on U.S. Navy vessels. Hanwha is now able to compete for U.S. Navy contracts for the next five years, the notice adds.

“Hanwha Ocean believes that this project, which the U.S. Navy is conducting as a pilot project in the Asian region, will be an important turning point for changes in the U.S. Navy ship [maintenance, repair and overhaul] market in the future,” the announcement states.

“In particular, with the recent acquisition of the Philly Shipyard in Philadelphia, U.S.A. and Hanwha Ocean’s winning of this project, Hanwha’s entry into the U.S. Navy ship business appears to be gaining momentum,” the notice continues.

Earlier this summer, Hanwha finalized a $100 million purchase agreement to buy Philly Shipyard from its Norwegian owner, investment group Anker ASA. The deal, which is expected to close before the end of fiscal year 2024, received Navy Secretary Carlos Del Toro’s blessing.

Del Toro visited multiple Japanese and South Korean shipbuilders -- including Hanwha -- earlier this year and has advocated for increased foreign investment in the U.S. shipbuilding market as a means of improving production capacity, driving down prices and injecting competition into the domestic industrial base.