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Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] SEOUL, June 1, 2026 — HD Hyundai Heavy Industries has rolled out an extensive industrial offset package as part of its bid to secure Canada’s next-generation submarine program, a project estimated at up to $60 billion, in a strategic push to gain an edge in the high-stakes competition.
The company has teamed up with Hanwha Ocean under a “K-defense one-team” framework to compete for the Canadian Patrol Submarine Project (CPSP), which aims to build up to 12 submarines to replace the Royal Canadian Navy’s aging Victoria-class fleet by the mid-2030s.
The Canadian government shortlisted the Korean consortium alongside Germany’s TKMS as preferred bidders last year and received final proposals in March. A preferred bidder is expected to be selected in June.
A key element of the Korean bid is a comprehensive offset proposal designed to deliver broad economic benefits to Canada beyond submarine construction.
This includes a plan led by HD Hyundai Oilbank to collaborate with Canadian crude oil producers and import Canadian oil worth several trillion won over the course of the project. The proposal also outlines joint research and development initiatives with Canadian universities and research institutes in advanced sectors such as artificial intelligence and biotechnology, aimed at establishing long-term industrial cooperation between the two countries.
The strategy reflects Canada’s evaluation criteria, which place significant weight on economic contributions and industrial impact. According to disclosed guidelines, submarine performance accounts for only about 20% of the total score, while financial terms and domestic economic benefits carry a combined weight of 30%, making industrial cooperation a decisive factor.
HD Hyundai Heavy Industries has also intensified engagement with Canadian shipbuilding and defense stakeholders. The company recently held strategic discussions at the Ottawa office of Davie Shipbuilding to explore broader cooperation in naval and shipbuilding projects.
High-level exchanges have also continued, with executives from Irving Shipbuilding visiting the company’s Ulsan headquarters in May, and Canada’s defense procurement officials touring its global R&D center earlier this year.
The Korean shipbuilder is leveraging its track record in submarine construction as a key competitive advantage. Since successfully delivering Son Won-il-class submarines in 2007, the company has expanded its capabilities, most recently delivering a 3,000-ton submarine equipped with submarine-launched ballistic missile (SLBM) capabilities in April.
It is also pursuing global submarine development projects with partners in countries such as Peru and Portugal, and plans to offer technology transfer as well as operational and maintenance consulting to Canadian shipyards if selected.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
