Korean shipyard HD Hyundai signs construction, MRO agreement with Philadelphia Shipyard

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HD Hyundai Heavy Industries Co., Ltd.’s shipyard in Ulsan, South Korea. (SeongJoon Cho/Bloomberg via Getty Images)

WASHINGTON — South Korean shipbuilding giant HD Hyundai Heavy Industries has signed a memorandum of understanding with Philadelphia Shipyards to collaborate on the construction and maintenance of naval vessels ordered by the U.S. government.

Under the new agreement, the two companies will “explore potential business relationships related to future U.S. government shipbuilding programs and maintenance, repair and overhaul programs,” according to a statement from Philadelphia Shipyards.

HD Hyundai Heavy Industries executive Won-ho Joo said: “We look forward to further expanding Hyundai Heavy Industries’ influence in the global defense market through cooperation with U.S. companies in government and military shipbuilding and MRO business.”

Meanwhile, the Philadelphia Shipyard, located in the city of the same name, was once a U.S. Navy shipyard. It is a subsidiary of Norwegian industrial investment group Aker ASA and is headquartered in Oslo, Norway. The company was established in 1997 and is best known for its work in the commercial container ship and tanker sectors.

Steinar Nerbovik, President and CEO of Philadelphia Shipyard, said: “Philadelphia Shipyard and HD Hyundai have a long and satisfying history of collaboration, and we are very honored by the idea of ​​future collaboration with Hyundai Heavy Industries on U.S. Government shipbuilding project opportunities.”

According to Philadelphia Shipyard, the two companies have previously collaborated to build 22 commercial product tankers.

The memorandum of understanding is the latest in a series of moves by South Korea’s defense industry to integrate into U.S. supply chains, a move ostensibly prompted by Navy Secretary Carlos del Toro’s visits to Asia in recent months and an open invitation to such Promoted by investment.

Today’s announcement comes after South Korea’s other major shipbuilder Hanwha made an unsolicited takeover bid for Australian contractor Austal, including a controlling stake in Alabama-based Austal USA. Australia rejected the takeover due to regulatory issues – which Hanwha said would not hinder the deal – but both sides appeared to have left open the possibility of moving forward with the deal.

Separately, the Biden administration earlier this month strongly opposed a proposed deal by Japan’s Nippon Steel Corp to acquire U.S. Steel Corp. of Pittsburgh. Although del Toro said he had not visited the Japanese company during his trip to Asia, the potential deal hits an industry on which the shipbuilder relies.

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