South Korea's Hanwha Corp. has signed a memorandum of understanding (MOU) with Algoma Steel Inc. and the Automotive Parts Manufacturers' Association (APMA) to explore manufacturing military and industrial ground vehicles in Canada. The agreement, announced on Monday, aims to combine Algoma's defence-grade steel, APMA's network of domestic suppliers, and Hanwha's military vehicle technology for both domestic and export markets.
Submarine Contract Pivotal
The MOU's success hinges on Hanwha winning a multibillion-dollar contract to supply up to 12 submarines to the Canadian government, expected to be awarded later this month. Glenn Copeland, CEO of Hanwha Defence Canada, stated, "A lot of this is contingent right now on Hanwha actually winning the submarine program." The contract, estimated at $25 billion, would mark Canada's first new submarines in decades.
Economic Commitments
A South Korean delegation, led by presidential special envoy Kang Hoon-sik, attended the announcement in Vaughan, Ontario. The delegation outlined plans to generate 430,000 jobs and $96.3 billion in economic activity between 2026 and 2044. Commitments include doubling investment in LNG Canada to $3.2 billion, purchasing $9 billion in Canadian critical minerals, investing in graphite mines, and importing 16-20 million barrels of Canadian crude oil annually over two years, making South Korea Canada's third-largest export market for oil.
Production Plans
Copeland noted that the MOU involves "multiple hundreds of vehicles to be produced in Canada for the army, for future needs." APMA, as the majority shareholder, will determine whether a new facility is needed or an existing plant can be retooled. Hanwha has also pledged collaborations with Canadian R&D organizations in energy, critical minerals, aerospace, maritime surveillance, and autonomous systems.
Germany's Thyssenkrupp Marine Systems (TKMS) is competing for the submarine contract and has made its own commitments, including manufacturing torpedoes in Manitoba and building a maintenance facility in Canada. Copeland emphasized that Hanwha's investments would commence immediately if the submarine deal is secured, stating, "Everyone heard the commitment from us is to commence the investments right away, not to wait."
