A South Korean shipbuilder will pump $5 billion of capital expenditure into a shipyard in Philadelphia, Pa., to bolster the country’s ongoing investments in U.S. shipbuilding, the company announced.
Korean-owned Hanwha, which late last year bought the Philly Shipyard and renamed it Hanwha Philly Shipyard, disclosed the investment Tuesday, one day after South Korea’s president met with President Donald Trump in the Oval Office.
“The $5 billion program will be dedicated to the installation of additional docks and quays to increase capacity,” reads a company news release.
The investment comes as the new South Korean owners want to start building military ships at the yard on the banks of the Delaware River and increase the production of both military and commercial vessels.
“Hanwha is also reviewing the build-out of a new block assembly facility. Through this expansion, Hanwha aims to increase Philly Shipyard’s annual production volume from less than two vessels to up to 20,” the release continues. “As a global leader in [liquefied natural gas] vessels, Hanwha aims to produce LNG carriers, naval modules and blocks, and, in the long-term, naval vessels out of its U.S. shipyard.”
During the Monday meeting with South Korean President Lee Jae Myung at the White House, Trump acknowledged the length of time needed to ramp up shipbuilding.
“We really gave up the shipbuilding industry foolishly, many years ago,” Trump said. “But we’re going to start it up again.”
During a visit to Hanwha Philly Shipyard last month, chief executive officer David Kim said he hopes the yard can build 10 ships per year in a decade, USNI News previously reported.
“We’re already in discussions with the Navy [for] different opportunities,” Kim told reporters last month. “There is a lot of support because if you’re following what’s going on with the Navy and shipbuilding: crisis. Falling behind the number of ships versus the Chinese Navy. Every project [is] behind at least one to three years and that number [is] getting longer. Every project being over budget. And so the Navy needs capacity.”
South Korea will invest $150 billion in American shipbuilding to meet obligations under a recently negotiated trade agreement between the U.S. and South Korea, according to Hanwha. That investment is more than the $100 million Hanwha paid for the Philly Shipyard last year.
“Hanwha Philly Shipyard is expected to play a key role in future collaboration between the two countries,” reads the company release.
Meanwhile, another South Korean company on Tuesday announced a separate investment in U.S. shipbuilding. Samsung Heavy Industries will team up with Vigor Marine Group to perform maintenance on U.S. ships overseas.
“The collaboration will bring expanded forward-deployed maintenance, repair, and overhaul (MRO) capacity to the Indo-Pacific region, offering the U.S. Navy and Military Sealift Command (MSC) a compelling new option to keep vessels mission-ready,” reads a company news release from Vigor. “In addition, the two leading companies may explore opportunities to support a U.S. shipbuilding renaissance, including a return to Vigor Marine Group’s shipbuilding roots in the Pacific Northwest.”
The U.S. has been experimenting with repairing Military Sealift Command ships in foreign shipyards over the last year. In March, Hanwha Ocean’s Geoje shipyard finished repairing Lewis and Clark-class dry cargo ship USNS Wally Schirra (T-AKE-8) as part of a pilot program, USNI News reported.