The state defense procurement agency signed an initial agreement Tuesday with major shipbuilders Hanwha Ocean Co. and HD Hyundai Heavy Industries Co. to promote cooperation in warship export projects, according to officials, according to Yonhap.
Under the memorandum of understanding (MOU), the three sides will work together to win overseas warship deals, with Hanwha Ocean taking the lead on submarine projects and HD Hyundai Heavy on surface ships, according to the Defense Acquisition Program Administration (DAPA).
DAPA said the shipbuilders would offer support to each other, expressing expectations the move will help them focus on projects catered to their strengths and possibly lead to further cooperation, such as joint development projects.
“The MOU signing is expected to establish the foundation for joint growth in South Korea’s defense industry,” DAPA Minister Seok Jong-gun said in a release.
DAPA has sought cooperation between the two shipbuilders after they failed to be shortlisted for a major Australian frigate project last year, losing out to Japan’s Mitsubishi Heavy Industries and Germany’s Thyssenkrupp Marine Systems.
The rival shipbuilders have been in fierce competition with each other to win overseas warship projects, as well as a next-generation destroyer project in South Korea.
Earlier this month, the industry ministry shortlisted the two companies to become final candidates for the 7.8 trillion-won (US$5.45 billion) Korea Destroyer Next Generation project aimed at building six new destroyers.