A model of Hanwha Ocean's Jangbogo-III Batch-II submarine is displayed at a defense seminar in Seoul, Wednesday. Courtesy of Hanwha Ocean

Hanwha Ocean is set to establish a subsidiary in the United States, as part of its strategy to expand into the North American defense industry.

The U.S. unit is expected to serve as a foothold for Hanwha Ocean to secure overseas shipyards and stakes in companies related to defense.

According to its quarterly report released on Thursday, the board of directors of Hanwha Ocean approved the establishment of the subsidiary, Hanwha Ocean U.S. Holding Company.

The decision is seen as a concrete step toward realizing its vision of increasing the proportion of special ship projects, such as warships, by securing overseas production bases.

In August, Hanwha Ocean unveiled its plan to boost sales from its special ship business unit from 850 billion won ($654.8 million) to 2.9 trillion won. Toward that end, the company is considering securing foreign shipyards or making equity investments in defense-related foreign companies, and there have been recent reports about its pursuit of acquiring U.S.-based Philly Shipyard.

The decision to establish a subsidiary appears to be a preparatory step to implement those plans. Hanwha Ocean plans to use 420 billion won, equivalent to 28 percent of 1.49 trillion won raised through a capital increase, to establish global production bases and acquire stakes in vessel maintenance, repair and operations (MRO) companies and expand its presence in the global defense industry.

Hanwha Ocean has been actively pursuing its entry into the North American market. It recently participated in the Deep Blue Forum 2023, a submarine-focused forum held in Ottawa, Canada, where it signed four memoranda of understanding with four local firms on bilateral cooperation in Canadian submarine projects.

The Canadian government is currently considering the introduction of 12 new submarines to replace the four Victoria-class submarines held by the Canadian Navy. The project, including their maintenance, is estimated to be worth 60 trillion won, and the contractor selection is expected to end by 2026.

“Hanwha Ocean draws attention from overseas markets, as it is capable of not just building submarines, but changing designs for submarines in accordance with the requirements of each country,” an official at Hanwha Ocean said.

The company also offers stable submarine maintenance services by partnering with a group of 200 parts manufacturers here.