Industry Minister Kim Jung-kwan departed for Canada on March 5 to support a Korean consortium's bid for the country's patrol submarine project. The deal involves procuring up to 12 submarines in a project valued at around 60 trillion won ($41-43 billion), with the Korean group as one of two finalists alongside Germany's Thyssenkrupp Marine Systems. The minister indicated that Korean investments in Canada could be reduced if the contract is split.
Industry Minister Kim Jung-kwan departed from Incheon International Airport on March 5 for Canada to bolster a Korean consortium's bid in the Canadian Patrol Submarine Project. The consortium, made up of Hanwha Ocean and HD Hyundai Heavy Industries, is vying for a contract worth an estimated 60 trillion won ($41-43 billion) to supply up to 12 submarines. Kim plans to meet Canadian Industry Minister Melanie Joly and other officials to highlight opportunities for broad industrial collaboration.
He is also scheduled to attend the completion ceremony for LG Energy Solution's joint electric vehicle battery plant in Ontario. The South Korean government has been assisting the consortium, which is one of two finalists alongside Germany's Thyssenkrupp Marine Systems. At the airport, Kim told reporters, "We are not jumping to conclusions on whether the bid is going well or not at the moment, and are just trying to do our best," pledging to pitch a package including industrial ties.
According to a report in The Globe and Mail citing Canadian government sources, Ottawa is considering splitting the order: six KSS-III Batch-II submarines from Hanwha for the Pacific coast and six Type-212CD from TKMS for the Atlantic. Kim responded, "Of course, we have been trying to win an order for 12 submarines. However, it totally depends on the Canadian government’s decision."
If split, Seoul indicated that investments by Korean firms in Canada would be smaller than initially proposed, potentially easing pressure from Ottawa's demands for large-scale offsets, such as Hyundai Motor building a local auto plant. Hyundai has countered with a proposal to invest in hydrogen fuel cell infrastructure instead. Hanyang University professor Moon Keun-sik, a former submarine commander, said, "Korea should reconsider its investment plan from scratch if Canada splits the contract."
A split could limit profitability for Hanwha by hindering mass production cost savings and future maintenance revenue, though it might reduce delivery risks. Glenn Copeland, head of Hanwha Defence Canada and a former Royal Canadian Navy officer, stated the company supports a split decision if made, but hopes for all 12. Hanwha Ocean emphasized that procurement decisions rest with the Canadian government. Analyst Kang Kyung-tae from Korea Investment & Securities advised increasing holdings in shipbuilding stocks, citing a strong chance of at least six submarines.
