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HD Hyundai Heavy Lands Historic $463 Million Warship Deal with Peru

Partnership Opens Door for Decade-Long Collaboration and Future Multi-Billion-Dollar Shipbuilding Contracts
South Korea
h 329180.KO Mid and Small Cap 2000
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In a landmark agreement signifying South Korea’s expanding influence in Latin America, HD Hyundai Heavy Industries Co. has been awarded a significant contract valued at $463 million to construct four warships for the Peruvian Navy. This deal, the largest of its kind between Korea and a Latin American country, not only underscores Hyundai Heavy’s (HHI) global shipbuilding prowess but also marks the beginning of a long-term partnership with the Peruvian Navy.

The contract comprises the construction of two 1,500-ton logistics transport auxiliary ships and two more specialized vessels—a 200-ton oceangoing patrol vessel and a 3,400-ton multi-role combat ship, to be built in Peru’s Callao shipyard in collaboration with SIMA Peru S.A., the Peruvian state-owned shipbuilder. HD Hyundai Heavy is tasked with designing the ships and supplying the necessary equipment and technical support, while SIMA Peru oversees the final construction phase.

The Peruvian Navy’s fleet modernization project, valued at $63 million, was awarded to HHI after a competitive bidding process that saw the Korean shipbuilder outmaneuver international competitors from Germany, the US, the UK, France, Spain, Italy, and the Netherlands. A crucial factor in HHI’s selection was its commitment to technology transfer and the involvement of local industries—a strategy that likely tipped the scales in its favor given the Peruvian government’s emphasis on bolstering its domestic shipbuilding capabilities and infrastructure.

This contract not only enhances HHI’s position in the global shipbuilding industry but also signals Peru’s ambitious naval modernization and expansion plans. With the Callao shipyard set to play a central role in Peru’s naval upgrade, the country is poised to increase its maritime capabilities significantly. Furthermore, the collaboration is seen as a strategic move for Peru to diversify its defense partnerships and strengthen its maritime sovereignty while contributing to the local economy through job creation and the development of shipbuilding expertise.

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