Hanwha Ocean Targets Thai Frigate Contract to Regain Footing

Hanwha Ocean is vying for a crucial contract to supply a next-generation frigate to the Royal Thai Navy, seeking to rebound after a setback in Canada's submarine tender. The company faces stiff competition from Turkish firms and HD Hyundai Heavy Industries in this bid, with the Thai navy expected to announce its decision soon.

The 4,000-ton frigate project, valued at approximately 800 billion won, is a significant opportunity in Southeast Asia, a key export market for South Korean shipbuilders. While the immediate contract size is modest, the Thai navy plans to procure three additional frigates, potentially expanding the deal to 3 trillion won. This regional demand is driven by security concerns, particularly related to China's growing naval power and ongoing South China Sea disputes.

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Countries bordering the South China Sea and their neighbors are acquiring warships and submarines for security reasons.

Hanwha Ocean's strategy for the Thai bid is described as a "frontal breakthrough" approach, relying on the trust built from delivering a state-of-the-art frigate to the Thai navy in 2018 when it was Daewoo Shipbuilding & Marine Engineering. The company is emphasizing its established relationship and the continuity of naval capabilities, a factor considered important given the Thai monarchy's significant influence.

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They prefer Korean-made vessels that meet delivery times, technological standards, and price competitiveness.

HD Hyundai Heavy Industries, known for its strength in surface vessels, is employing a "Crane formation" strategy, drawing on its success in the Southeast Asian market. Since 2016, the company has secured orders for 12 vessels, including frigates and offshore patrol vessels, for the Philippine Navy, delivering five ahead of schedule. For the Thai bid, HD Hyundai Heavy Industries has proposed its HDF-4000TH frigate, a customized version of a model exported to Peru.

Both South Korean shipbuilders are offering advanced features, including stealth hull designs and drone defense systems. Hanwha Ocean has partnered with European defense firms for its radar, combat systems, and weapon integration, catering to the Thai navy's preference for European technology. HD Hyundai Heavy Industries' proposal is also equipped with advanced radar and drone defense capabilities.

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Thailand's monarchy holds significant authority. The continuity of warship construction will likely be a key consideration.

The Thai navy has stipulated requirements for at least 20% domestic parts and technology transfer. Unlike the Canadian submarine project, a unified "Team Korea" approach was not formed for this bid, as the project's scale did not necessitate it. Industry observers note that the Thai navy specifically invited both Korean companies to participate.

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The project scale is not large, so there was no need to form a 'Team Korea'. The client specifically invited both companies to bid.