Hanwha Ocean Enters the USD 18 Trillion US Military Ship Maintenance Market
Hanwha Ocean is making an entry into the military ship maintenance, repair, and overhaul (MRO) business. The decision comes amid escalating tension in the Asia-Pacific region due to the recent U.S.-China conflict and an expected surge in the MRO market. The United States, which spends US$13.9 billion (approximately 18.2 trillion won) annually on MRO alone, is expected to top the list of potential customers.
According to sources in the shipbuilding industry on June 4, Hanwha Ocean established a dedicated military ship MRO department last month, following the acquisition and restructuring of Daewoo Shipbuilding & Marine Engineering. While Daewoo Shipbuilding & Marine Engineering had carried out military ship maintenance in the past, this is the first time a dedicated department has been established for this task.
The military ship MRO business manages the entire cycle of repair and maintenance for specialized ships such as surface ships and submarines. Although new ship orders are large in scale, they often fluctuate with market changes, leading to potential losses during economic downturns. However, the MRO business, though not as large, offers the advantage of securing stable long-term revenue.
The launch of this dedicated MRO department is also expected to have positive implications for future military ship exports. The trust gained from winning the technically demanding military ship MRO business could increase the potential for defense exports. Major countries in the Asia-Pacific region, including the United States, are currently engaged in a naval power expansion competition. However, according to the shipbuilding industry's analysis, supply is not meeting demand.
About captioned picture: The Dosan Ahn Chang-ho submarine, a 3,000-ton class submarine constructed by Daewoo Shipbuilding & Marine Engineering, the predecessor of Hanwha Ocean, on its launch day on Sept. 14, 2018 in Geoje, South Gyeongsang Province, Korea.
Note: Article by Jasmine Choi (www.businesskorea.co.kr)
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