Hanwha promises military-vehicle deal for Algoma Steel if it gets Canadian submarine contract

3 top out southward Korean officials moved to beef up Hanwha Ocean's call to build Canada's new submarine fleet with a reinforced partnership between the shipyard and Canada's Automotive Parts Manufacturers Association (APMA) and Algoma Steel on Monday.

Presidential Special Envoy Kang Hoon-sik, Lee Yong-cheol, the minister of the Defense Acquisition Program Administration (DAPA) and Moon Shin-hak, the country's vice-minister of trade, industry and resources (MOTIR), were present at the signing of the partnership at Martinrea International in Vaughn, Ont.

All three said the visit underscores the industrial commitment South Korea is prepared to make in the event Hanwha Ocean wins the multibillion-dollar submarine contract.

They revealed the Hanwha Group had signed an additional memorandum with the APMA and Algoma to use Canadian steel in the parts manufacturing of armoured vehicles at Martinrea.

"This partnership is significant because it seeks to establish a complete Canadian supply chain — from raw materials and components to final vehicle production — entirely within Canada," said Kang.

"The Korean government expects this collaboration to contribute meaningfully to Canada's industrial sovereignty, economic resilience, national security and job creation."

They also say the agreement further responds to the government of Canada's calls for the contract bidders to support Canada's automotive and steel sectors.

The South Korean company has dangled the prospect of an assembly facility for military ground vehicles as part of its industrial benefits pitch.

Prime Minister Mark Carney said last week that his government is prepared to decide between the Hanwha bid and a competing proposal from Germany's ThyssenKrupp Marine Systems (TKMS) by the end of the month. 

The South Korean navy recently showcased the KSS-III submarine it wants to sell to Canada during a port visit in Victoria.

The signing of the agreements by such a high-level delegation "sends a powerful signal that the Korean government is serious about building real, lasting capability here in Canada, with Canadian companies," said Flavio Volpe, president of the APMA.

"Our members came ready to discuss practical opportunities, and they are ready to help build the next generation of Canadian defence manufacturing."

Volpe added there would be big benefits to Canada's manufacturing sector if the federal government chooses Hanwha to supply the submarines.

"The economic activity that comes from that deal for automotive, is the equivalent of one new car plant here," Volpe said. "What that means is probably 15,000 direct jobs through the supply chain and another 15,000 that are indirect."

TKMS — backed by the German and Norwegian governments — is pitching the Type 212CD submarine, an updated version of the company's existing Type 212 design which is in service with several allied navies. 

Both companies have been busy signing partnership agreements in anticipation of the Canadian government's decision.

On Friday, TKMS and CAE, the Canadian simulator and training giant, signed an agreement aimed at strengthening their existing collaboration.

"Modern naval operations require highly adaptive training environments that evolve alongside emerging threats," said Oliver Burkhard, CEO of TKMS, in a statement.

"This agreement with CAE represents an important step in strengthening our collaboration and expanding our ability to deliver integrated naval training and simulation solutions. By combining our expertise, we are well positioned to support operational readiness and long-term capability development for naval forces operating in increasingly complex environments."

---

---