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Hanwha acquires Philly Shipyard, first Korean entry into US shipbuilding

June 21, 2024 - 15:56 By Moon Joon-hyun

The Philly Shipyard, previously known as Aker Philadelphia Shipyard, is a commercial shipbuilding facility situated on a section of the former Philadelphia Naval Shipyard in Philadelphia, Pennsylvania. (Hanwha Group)

South Korean conglomerate Hanwha Group has acquired Philly Shipyard for $100 million, making it the first Korean company to enter the US shipbuilding industry.

Announced on Friday, the acquisition involves Hanwha Systems holding a 60 percent stake and Hanwha Ocean a 40 percent stake. These subsidiaries specialize in defense and shipbuilding, respectively.

Philly Shipyard, located in Philadelphia, constructs commercial vessels in compliance with the Jones Act, which mandates that goods transported between US ports be carried on American-built ships. It has produced more than half of the petrochemical carriers and container ships in the US, and also specializes in offshore wind installation vessels and government ships, including training vessels for the US Maritime Administration.

Philly Shipyard is also noted for its work in repairing and modifying naval transport ships. Last July, US President Joe Biden attended a steel-cutting ceremony at the shipyard for an offshore wind farm vessel.

For Hanwha Group, this acquisition serves as an entry point into the US commercial marine and defense markets. Hanwha Systems plans to develop autonomous commercial ships, leveraging its expertise in ship combat systems and logistics support platforms. The company aims to supply advanced smart ship solutions, such as engineering control systems and automated control systems, to the commercial shipping sector.

Hanwha Ocean aims to diversify its revenue by establishing a US production base and expanding its work on medium-sized tankers and container ships, building on Philly Shipyard’s strengths.

The shipyard’s large docking facilities will also support Hanwha’s maintenance, repair, and operations services, positioning the group to capitalize on the extensive needs of the US Navy’s shipbuilding and maintenance market.

“Acquiring Philly Shipyard allows us to leverage our combined expertise and create synergies that will strengthen Hanwha Group’s position in the US and global shipbuilding and defense markets,” said Eoh Seong-cheol, CEO of Hanwha Systems.

“We’re eager to leverage Hanwha Systems’ cutting-edge ship solutions, cybersecurity innovations, and unmanned vessel tech to solidify our US presence and expand our global footprint. Together, our expertise in shipbuilding and integrated solutions will drive growth in the US market and establish us as a global leader,” said a Hanwha Ocean official.

Hanwha Ocean has been accumulating investment momentum with a large infusion of capital since becoming part of Hanwha Group in May last year. In the second half of last year, the company said it would use 28 percent of the 1.49 trillion won ($1.07 billion) it raised to expand its global defense business and acquire stakes in ship MRO companies.