Hanwha Philly vs. HD Kiewit: First Face-Off to Be Over an 8 Trillion Won Logistics Ship; Capacity Is Key

[Financial News] As U.S. Navy warship procurement gathers pace, the first contest between Hanwha Group and HD Hyundai is likely to be for the Next-Generation Logistics Ship (NGLS) program, estimated to be worth 8 trillion won. The contract competition is expected to take place in 2028, and industry observers say capacity will be key given the urgent need to address the aging U.S. fleet and boost naval strength.
According to industry sources on the 5th, the first major project Hanwha Philly Shipyard and HD Kiewit Shipbuilding are likely to compete for is NGLS. Congressional Research Service materials indicate that the plan is to complete the conceptual design next year, with Hanwha Defense USA, Inc. and Hanwha Philly Shipyard participating, and sign the contract in 2028.
The planned procurement is reportedly 13 ships, at an estimated cost of about $450 million each. The total project cost is expected to exceed 8 trillion won. Specific plans will be determined based on the conceptual design currently being developed by Hanwha Defense USA, Inc. and Hanwha Philly Shipyard with U.S. ship design firm Vard Marine US.
Hanwha appears to have a slight head start. Hanwha Philly Shipyard is not only participating in the NGLS conceptual design but also recently won a contract to build its first U.S. Navy vessel. It secured a contract with TOTE Services, the U.S. Navy’s vessel construction manager (VCM), to build one medium landing ship (LSM). The contract is worth $269 million and includes an option to build three more. It has also signed a contract with the U.S. Missile Defense Agency (MDA) to build a missile range instrumentation vessel (MRIV).
HD Hyundai is partnering with Kiewit, the largest construction, engineering and infrastructure company in the United States, to build a new, state-of-the-art shipyard. This is a different strategy from Hanwha Group’s, which is expanding its infrastructure by acquiring existing shipyards. The goal is to break ground next year and begin full-scale operations in 2029. Although the NGLS contract is expected to be awarded in 2028, contract performance is expected in 2029, so HD Kiewit appears likely to enter the competition. The plan is to maximize productivity using advanced technologies such as digital twins and robotic welding.
The U.S. Navy is reportedly seeking to acquire ships as quickly as possible to address its aging fleet and China’s expanding naval strength. Hanwha Group and HD Hyundai are highlighting their competitiveness from different angles on this front.
Hanwha Philly Shipyard emphasizes that it has already ramped up and is gaining momentum. It has upgraded a shipyard that was already operating, and construction is already underway on two vessels, including the LSM and MRIV. The company is stepping up its efforts, having recently appointed President Kim Hyuk, who has 25 years of shipbuilding experience at Hanwha Ocean and other companies. In response, HD Kiewit Shipbuilding emphasizes that advanced technology will give it far greater capacity than existing shipyards. The size of its dock has yet to be determined, but even with just one dock, it may be able to build ships faster.
Some industry observers, however, believe the winner and loser may not be clearly decided. The U.S. Navy divides warship construction among multiple shipyards. The LSM contract won by Hanwha Philly Shipyard is part of a total planned procurement of 35 ships. The Navy assigned up to four to Hanwha Philly Shipyard and commissioned the rest to several other shipyards. NGLS is also likely to be built simultaneously at multiple shipyards.
[email protected] Kim Yun-ho Reporter