Australian frigate procurement: Hyundai and Hanwha at odds
– South Korean government wants Hyundai and Hanwha to be one team
– Future submarine procurements in Canada and Poland will also be affected
Summary from the article published in Korea Economic Daily.
Australian general-purpose frigate procurement:
The Australian Ministry of Defence sent a request for information to Germany, Spain, Japan and South Korea on May 24.
Korea Economic Daily: (2024.06.17)
On June 13, it was pointed out that “South Korea could lose 10 trillion won worth of business opportunities to Japan.”
Hyundai Heavy Industries and Hanwha Ocea at odds:
The competitive relationship between the two companies is too intense to build a cooperative relationship with each other.
Albanese government announces:
In February 2024, the results of an analysis of the reorganization of the Australian Navy were announced.
The report called on the Australian government to “double its surface ship force.”
1. 1. The acquisition of large unmanned ships (6 ships) that can also be operated manned, and
2. The acquisition of general-purpose frigates (11 ships).
Successor to the Anzac-class frigate:
Currently, the requirements and procurement schedule for the general-purpose frigate are completely unknown.
The report recommended that ‘three ships should be built overseas and eight in Western Australia.’
Candidates being considered are South Korea’s Daegu-class Batch II and Batch III.
Australian Department of Defence schedule disclosure: Defense News
1. A request for information was sent to shipbuilding companies in four countries on May 24.
2. Details cannot be disclosed in order to ensure fair procurement procedures.
3. Each shipyard was given four weeks to respond to the request.
4. An additional three weeks were given to explain how the ships would be built in Australia.
The selection of Project Sea 3000 will take place in 2025.
The first ship built overseas is scheduled to be commissioned in 2030.
Korea Economic Daily article:
The outline of the Australian frigate program has been revealed.
1. It was pointed out that ‘Korea could lose a 10 trillion won business opportunity to Japan.’
2. This will also affect Canada and Poland’s submarine procurement.
Competitors from each country:
Hyundai Heavy Industries, Hanwha Oceana, Mitsubishi Heavy Industries, Navantia, and ThyssenKrupp Marine Systems are expected to compete.
1. The highest score goes to Mitsubishi Heavy Industries’ Mogami-class, which is equipped with US weapons.
2. Excellent interoperability with the Australian Navy, ample hull size, and threat detection capabilities.
Korean government and Korean companies:
The Korean government and Korean companies are promoting the good cost-effectiveness.
1. Hyundai Heavy Industries’ Chungnam-class frigate (3,600t) = FFX Batch-III,
2. Hanwha Ocean’s Daegu-class frigate (3,100 tons) = FFX Batch-II
Both ships are small in size, but have better offensive and defensive capabilities than the Mogami-class.
Delivery of three ships by 2030:
The company that receives the order will deliver three ships built in Japan by 2030.
Predictions on Japan’s order structure:
1. There is a high possibility that they will respond by forming an “All Japan” team.
2. Mitsubishi Heavy Industries will probably build the ships it receives an order for in collaboration with Mitsui E&S.
Korea’s order structure:
The Ministry of National Defense and the Defense Acquisition Program Administration of Korea hope that ‘Hyundai Heavy Industries and Hanwha Oceana will jointly receive the order.’
1. However, the two companies are in fierce conflict over the leak of confidential information related to the KDDX project.
2. Hyundai Heavy Industries illegally obtained military secrets in an attempt to gain an advantageous position.
Currently, Hyundai Heavy and Hanwha Ocean are not in a good mood to build a cooperative relationship.
Lack of docks for building frigates:
In Korea, there are few docks for special ships to build frigates.
1. Hyundai Heavy only has two.
2. Hanwha Ocean only has one.
Considering demand from the Korean Navy:
1. Even if the order is received, the deadline will not be met unless the two companies build separately.
2. It is risky for one company to take full responsibility for three ships built domestically and eight ships built overseas.
Meeting the deadline for the three ships built in Korea:
Currently, the relationship between the two Korean companies is bad, and they are marketing separately.
Even if the order is received, it will be difficult to meet the deadline for the three ships built domestically.
Submarine procurement from Canada and Poland:
Incidentally, it has been pointed out that “it will also affect other orders.”
He also pointed out that Hyundai Heavy Industries and Hanwha Oceana are working separately with overseas companies in the procurement of submarines for Canada and Poland.
If South Korea fails in Australia, it will have a major impact on other orders.