South Korean shipbuilder Hanwha Ocean Co. is making an aggressive push for Canada’s submarine replacement contract, showcasing its KSS-III design at Ottawa’s CANSEC defense exhibition as it competes for what could become a $45 billion (US$33 billion) deal.
Hanwha Ocean and affiliate Hanwha Aerospace are the sole South Korean participants at the two-day event, promoting their “integrated defense solutions” under the slogan “With Canada, For Canada.” The companies are targeting Canada’s troubled Canadian Patrol Submarine Project, which aims to replace four aging Victoria-class submarines with up to 12 new vessels.
Hanwha’s pitch promises delivery of initial submarines by 2032, potentially beating competitors including French, German and Swedish designs. The KSS-III Batch-II features lithium-ion batteries and air-independent propulsion, enabling underwater operations lasting over three weeks.
Yet questions remain about Canada’s commitment to the program. The project has faced repeated delays, with contract award now pushed to 2028 and first delivery scheduled for 2035. Canada’s Victoria-class submarines, acquired secondhand from Britain’s Royal Navy in the early 2000s, have suffered from high maintenance costs and limited operational availability.
Hanwha Ocean reported its first profitable year in four years in 2024, with defense sales exceeding 1 trillion won (US$740 million) and a 12% operating margin in that division. The company has been expanding internationally, recently acquiring Philadelphia’s Philly Shipyard and securing maintenance contracts with the U.S. Navy.
The submarine offer comes as Canada seeks to diversify defense partnerships beyond traditional U.S. suppliers, with relations strained under multiple administrations.
