President Yoon Suk Yeol and Peruvian President Dina Boluarte, second from right, applaud after Joo Won-ho, left, head of HD Hyundai Heavy Industries' naval and special ship business unit, and SIMA General Manager Cesar Augusto Benavides Iraola sign a memorandum of understanding at the Government Palace in Lima, Peru, Saturday (local time). Yonhap

The signatures of President Yoon Suk Yeol and Peruvian President Dina Boluarte are put on a nameplate to be attached to one of the naval vessels under joint construction by HD Hyundai Heavy Industries and SIMA in Peru. Yonhap

HD Hyundai has been pushing for joint development of submarines with SIMA, a Peruvian state-owned shipyard, following their agreement to construct surface vessels for the South American country's navy to replace its outdated warships.

The Korean conglomerate said Monday that one of its shipbuilding units, HD Hyundai Heavy Industries (HHI), signed a memorandum of understanding (MOU) with SIMA on the sidelines of the 2024 Asia-Pacific Economic Cooperation summit in Lima, Saturday (local time), for their bilateral cooperation in the submarine sector.

President Yoon Suk Yeol and Peruvian President Dina Boluarte also attended the MOU signing ceremony and autographed the nameplates to be attached to naval vessels under joint construction by HD HHI and SIMA in Peru.

Based on the MOU, HD HHI and SIMA plan to develop submarines tailored for the Peruvian Navy.

Additionally, HD HHI will help modernize SIMA and strengthen cooperation with the Peruvian government for follow-up projects.

HD HHI set up a local office in Peru in September and sent equipment and components last month to build warships for the Peruvian Navy.

This came after HD HHI and SIMA signed a 640.6 billion won ($460 million) contract to build one 3,400-ton frigate, one 2,200-ton offshore patrol vessel (OPV), two 1,400-ton amphibious warfare ships and four warships for the South American country's navy.

The deal is the largest among naval ship orders that any Latin American country has placed with a Korean company so far.

HD HHI also became a strategic partner of the Peruvian government and navy for the next 15 years.

As a result, the company was chosen as the preferred bidder to additionally build five frigates, three OPVs and two amphibious warfare ships for the Peruvian Navy.

The Korean shipbuilder emphasized that the achievement was the result of its cooperation with the Ministry of National Defense, the Republic of Korea Navy, the Defense Acquisition Program Administration, the Korea Coast Guard, the Ministry of Trade, Industry and Energy, the Embassy of Korea in Peru and the Korea Trade-Investment Promotion Agency.