South Korean delegation heads to Canada to lobby for submarine project amid competition with Germany
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Lee Jae Myung speaks during a press conference in Seoul last week. The South Korean President has pledged to build the world’s fourth-largest defence industry.Pool/Getty Images
South Korea’s presidential chief of staff said on Monday he was heading to Canada with Hyundai Motor executives and representatives of shipbuilders Hanwha and HD Hyundai in a bid to win a major submarine contract.
South Korea is competing against Germany’s TKMS in a race to win the Canadian project for a new fleet of up to 12 diesel-powered submarines, estimated by industry sources to be worth more than US$12-billion.
Chief of Staff Kang Hoon-sik said given the competition against a manufacturing superpower like Germany, “We believe the prospects are not necessarily easy.”
“I hope to … directly convey the excellent performance of our submarines as well as the government’s commitment to expanding industrial and security co-operation between our two countries,” Kang told reporters, before departing for Canada with Industry Minister Kim Jung-kwan.
The submarine project would be one of South Korea’s biggest defence procurement projects and would translate into an economic benefit of more than 40 trillion won (US$27.62-billion) and the creation of 20,000 jobs, Kang said.
South Korean President Lee Jae Myung has pledged to build the world’s fourth-largest defence industry as he seeks to beef up defence forces in the face of North Korea’s nuclear threat.
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Hyundai Motor Group Executive Chair Euisun Chung is joining the South Korean delegation to Canada, a person familiar with the matter said.
Chung is expected to lend his support for South Korea’s bid by discussing local co-operation with Canada in various areas, Yonhap news agency said, as Canada seeks to offset agreements from South Korean firms.
Kang said in a media interview earlier this month that Canada had asked for a car plant to be built locally by Hyundai.
Hyundai said in a statement that it does not have plans to build a car factory in Canada at this time, but said its parent group is reviewing a range of co-operation opportunities including in the hydrogen sector, leveraging Canada’s strengths.
Business leaders from South Korea and Canada will meet at an event in Canada on Monday local time to discuss co-operation in submarine, batteries and other strategic industries, South Korea’s business association said.
Last week, TKMS CEO Oliver Burkhard told Reuters the German company is in talks with Norwegian and German companies to offer a multibillion-dollar investment package to Canada in a bid to win the tender.
Hanwha Group also said on Friday it aimed to create a large number of jobs in Canada by 2040, through co-operation across various sectors, including submarines.
Canada, a NATO founding member, has the longest coastline in the world including the Arctic and plans to buy new submarines to modernize underwater surveillance and deterrence as its four-vessel fleet from the 1990s grows increasingly obsolete.
