[Exclusive] Navy to Expand Outsourcing of Warship MRO, Raising Hopes for Additional Hanwha Ocean Orders

[Financial News] The Republic of Korea Navy (ROKN) is set to expand the outsourcing of maintenance, repair, and overhaul (MRO) work for its warships to domestic shipbuilders. The move is aimed at building up the country’s relatively weak MRO capabilities by commissioning domestic shipyards to handle the Navy’s vessel maintenance and repair projects.
The expansion of warship MRO is also linked to the creation of a repair-shipbuilding cluster under the Make American Shipbuilding Great Again (MASGA) project. The government plans to invest 1.5 trillion won to establish the cluster near Busan New Port, as South Korea seeks to take on not only the construction of U.S. warships but also their MRO. The shipbuilding industry and political circles expect that experience in MRO for Korean and U.S. warships will enable South Korean companies to win various overseas MRO projects based on the repair-shipbuilding cluster.
A senior shipbuilding-industry official told Financial News on the 15th, “The expansion of private-sector outsourcing for warship MRO is being discussed in concrete terms, led by the ROKN.” The Navy is reportedly considering a shift to private-sector providers because of the need to introduce advanced MRO equipment and address an aging workforce. Brig. Gen. Shin Yu-chan, head of the Logistics Staff at Republic of Korea Navy Headquarters, also made remarks to the same effect when he attended a forum on building a maritime MRO and repair-shipbuilding cluster on the 3rd.
At the forum, Hanwha Ocean directly proposed expanding the outsourcing of warship MRO. Kim Dae-sik, an executive in charge of the company’s special-ship MRO business, said that one way to build up the country’s relatively weak MRO capabilities would be “to commission domestic shipyards to handle the Navy’s vessel maintenance and repair projects so they can build experience.”
Hanwha Ocean signed a contract last August to carry out the deep overhaul of the ROKN’s 7,600-ton Aegis destroyer ROKS Sejong the Great. A deep overhaul is the highest-level maintenance concept, involving comprehensive disassembly, inspection, and repairs to restore a vessel extensively. It was the first case in which the deep overhaul of a surface warship was outsourced to a private company rather than being handled by a Navy maintenance depot. If the deep overhaul of ROKS Sejong the Great is completed successfully next March, Hanwha Ocean is expected to become the top candidate for the growing number of warship MRO outsourcing projects in the future.
Hanwha Ocean has also called for contracts covering the entire lifecycle of a warship, from construction through maintenance and repair. Specifically, it proposed that the company be allowed to continue with MRO after delivering the Korean next-generation destroyer (KDDX) that it is currently building and managing. If contracts encompassing everything from construction to MRO become common, HD Hyundai Heavy Industries, the shipbuilding industry’s largest player, could also begin making a full-scale effort to strengthen its competitiveness in the MRO business.
[email protected] Kim Yun-ho Reporter