Accelerating Naval & Defense Expansion from Philadelphia Shipyard to the World
As geopolitical risks intensify—driven by the Russia-Ukraine war, Middle East instability, and U.S.-China power rivalry—nations are ramping up defense budgets and reorganizing military capabilities. Defense is no longer seen as an ethical dilemma but as a core component of sustainability and national resilience. Reuters recently noted that global markets are entering a “hot phase” of a new Cold War, with rising demand for defense stocks and safe-haven assets.
Riding this wave, South Korea’s Hanwha Group is rapidly emerging as a global player in both the shipbuilding and defense sectors. Moving beyond traditional exports, Hanwha is pursuing a strategy focused on localized production, global supply chain integration, and market-specific investments across the U.S., Europe, the Middle East, and Asia.
Strategic Investments for Long-Term Defense Leadership
In March, Hanwha Aerospace announced a 3.6 trillion KRW ($2.6 billion) capital increase, later scaled down to 2.3 trillion KRW following regulatory adjustments. Approximately 1.2 trillion KRW will be dedicated to expanding its naval and defense production footprint.
This investment spans strategic hubs, including the U.S.-based Philadelphia Shipyard, and aims to boost production capacity, secure advanced technologies, and enhance global procurement competitiveness. Hanwha’s long-term vision emphasizes transformation into a comprehensive defense powerhouse, prioritizing innovation in unmanned systems, smart factory infrastructure, and joint ventures.
Philadelphia Shipyard: Anchor of U.S. Expansion Strategy
Hanwha’s acquisition of the historic Philadelphia Shipyard—once home to over 40,000 workers during World War II—marks a critical milestone in its global expansion. Although currently producing only one vessel per year, Hanwha plans to increase output to over 10 ships annually. Facility upgrades are underway, including dock reactivation, new block assembly lines, and wharf expansions. Over 50 veteran engineers from Hanwha Ocean have been dispatched to implement process innovations and drive productivity.
The shipyard currently holds a backlog of seven vessels, including three for the U.S. Maritime Administration (MARAD) and four for private operators Matson and GLDD—all signed prior to the acquisition. With contracts secured through 2027, Hanwha now targets new orders under the U.S. Ready Reserve Force (RRF) program, which seeks to build 250 strategic sealift vessels over the next decade under the “Ships for America Act.”
ChunmooMultipleLaunchRocketSystem(MLRS)
Localized Production: A Must-Have for U.S. Defense Market
Hanwha is adopting a “full localization” model for the U.S. defense market, already managing the Radford Army Ammunition Plant modernization project. Future plans include localized production of artillery systems and ammunition. Given U.S. procurement laws that penalize foreign-made weapons, Hanwha is strategically positioning itself as an American entity via subsidiaries.
Hanwha Global Defense, led by former senior Pentagon and State Department official Michael Coulter, spearheads this strategy—echoing the approach taken by defense giant BAE Systems in the U.S.
Europe, Middle East, and Australia: Expanding the Global Footprint
In Europe, Hanwha is scaling up through a joint venture with Poland’s WB Electronics to locally produce CGR-080 guided missiles for the K239 Chunmoo system. In Romania, Hanwha secured a $1 billion contract for 54 K9 howitzers and 36 support vehicles, aligned with NATO’s Readiness 2030 initiative.
Meanwhile, in Australia, Hanwha is delivering Redback infantry fighting vehicles and K9 howitzers, and exploring joint ventures in Saudi Arabia. The K9A2 howitzer is also a leading contender in the U.S. Army’s next-generation program, having completed compatibility trials with the M982 Excalibur round and proven extended-range capabilities of up to 60km.
Changing ESG Paradigms: From Exclusion to Essential
Defense was once a pariah in ESG investing, but the global security crisis has reshaped that narrative. The new consensus—“there’s no sustainability without security”—has driven ESG fund allocations to defense stocks from $2.94 billion in 2022 to an estimated $8.71 billion by end-2024.
Aligning with this shift, Hanwha divested its 5.4% stake in civilian satellite operator Eutelsat to focus on military satellite and defense communications assets. The company is also advancing its battlefield capabilities through AI, autonomous weaponry, and digital twin technologies—positioning defense as a next-gen digital platform industry.
$8 Billion Investment for a Total Defense Solutions Future
Hanwha plans to invest 11 trillion KRW (approx. $8 billion) globally over the next four years, including 1.3 trillion KRW in the U.S. and 900 billion KRW in Europe and the Middle East. This marks a transition from transactional exports to full system-based contracts that include maintenance, upgrades, and spare parts.
The strategy also extends to adjacent sectors like shipbuilding, satellite communications, and aerospace—solidifying Hanwha’s transformation into a “total defense solutions” provider. The recent rebound in Hanwha’s stock price underscores investor confidence in its bold roadmap.
From K-Defense to a global force in security architecture, Hanwha is no longer just a player—it’s shaping the very framework of tomorrow’s geopolitical order.
