Hanwha Group has made a significant move into the U.S. shipbuilding industry by acquiring 100% of the shares of Philly Shipyard, a prominent shipbuilding facility located in Philadelphia. The acquisition, finalized on June 20, involved Hanwha Systems and Hanwha Ocean and amounted to $100 million, approximately 138 billion won. This strategic purchase marks Hanwha Group as the first Korean company to enter the U.S. shipbuilding market.

Philly Shipyard, established in 1997 on the site of the former U.S. Navy Philadelphia Shipyard, has a storied history in the American shipbuilding industry. The shipyard has supplied approximately 50% of the large commercial vessels built in the U.S., including petrochemical product carriers and container ships. It also has experience in constructing various types of vessels, such as large multi-purpose training ships for the U.S. Maritime Administration, offshore wind installation vessels, and government ships. Philly Shipyard is a U.S.-based subsidiary of Aker, a Norwegian company specializing in oil, gas, and renewable energy.

The acquisition is expected to provide Hanwha Group with a strong foothold in the U.S. commercial and defense shipbuilding markets. Philly Shipyard specializes in constructing commercial vessels that operate along the U.S. mainland coast, in compliance with the Jones Act, which mandates that goods transported between U.S. ports be carried on ships built, owned, and operated by U.S. citizens or permanent residents. This compliance is a strategic advantage for Hanwha Group as it enters the U.S. market.

Hanwha Systems plans to leverage its top-tier marine system technologies, such as the Integrated Control System (ECS) and Ship Automatic Control System (IAS), to develop autonomous commercial vessels. The company aims to create synergies with a diverse lineup of commercial vessels and rapidly expand its market presence from commercial vessels to special-purpose ships, including unmanned surface vehicles and naval ships. Hanwha Systems CEO Eo Sung-chul stated, “Hanwha Systems and Hanwha Ocean will create business synergies that can lead the global shipbuilding and defense markets through the acquisition of Philly Shipyard.”

Hanwha Ocean, on the other hand, intends to diversify its revenue streams by securing overseas production bases. The acquisition will enable Hanwha Ocean to expand its orders in the medium-sized tanker and container ship sectors, where Philly Shipyard has strengths, thereby enhancing its market position. By integrating its world-class eco-friendly ship technology, smart ship technology, and smart yard technology into Philly Shipyard, Hanwha Ocean aims to transform it into a shipyard with overwhelming technological and cost competitiveness in the North American region.

The largest dock owned by Philly Shipyard in the U.S. is expected to serve as an effective site for shipbuilding and Maintenance, Repair, and Overhaul (MRO) operations. This is particularly relevant as the U.S. naval ship market currently faces a supply shortage relative to the Navy fleet’s requirements, necessitating the expansion of shipbuilding facilities.

Hanwha Systems CEO Eo Sung-chul further emphasized the strategic importance of the acquisition, stating, “We will expand our export territory beyond the Middle East, Southeast Asia, and Europe to the U.S. market, securing new growth engines.”

The acquisition of Philly Shipyard by Hanwha Group is a significant development in the global shipbuilding industry. It aligns with recent trends emphasizing advanced defense technologies, system integration, and eco-friendly and smart ship technologies. Hanwha Group’s entry into the U.S. market is expected to have broader economic and strategic implications, potentially impacting U.S.-Korea trade relations, defense collaborations, and competition within the shipbuilding industry.

As Hanwha Group continues to expand its global footprint, the acquisition of Philly Shipyard represents a critical step in its strategy to secure new growth engines and establish a strong presence in the U.S. shipbuilding market. The collaboration between Hanwha Systems and Hanwha Ocean is poised to create significant business synergies, positioning the group as a key player in the global marine market.

Source:Businesskorea