Hanwha Ocean has teamed with Ontario-based Algoma Steel to supply materials for armored vehicles and submarines that it has pitched for the Canadian Patrol Submarine Project (CPSP).
The signed memorandum of understanding covers Hanwha contributing up to 345 million Canadian dollars ($250 million) for CPSP facility development and steel procurement, and another 275 million Canadian dollars ($200 million) for developing a structural steel beam mill in Sault St. Marie, Ontario.
Hanwha is also committing to buy Algoma Steel products worth up to 70 million Canadian dollars ($50 million). It will be used for CPSP-related activities, including the construction of the submarine as well as maintenance, repair, and overhaul infrastructure.
APMA Deal
It comes after the South Korean company signed an agreement in April with Canada’s Automotive Parts Manufacturers Association (APMA) to potentially manufacture military vehicles in-country.
APMA President Flavio Volpe highlighted the partnerships, describing them as a “powerful signal that the Korean government is serious about building real, lasting capability here in Canada, with Canadian companies.”
“The economic activity that comes from that deal for automotive, is the equivalent of one new car plant here … What that means is probably 15,000 direct jobs through the supply chain and another 15,000 that are indirect,” CBC Canada quoted Volpe as saying.
However, these investments in the Canadian industry depend on whether Hanwha secures the multibillion-dollar CPSP contract against its competitor, the German shipbuilding company TKMS.
A decision from the government may be expected by the end of June, according to Canadian Prime Minister Mark Carney.
Hanwha Ocean’s CPSP Bid
Canada issued a CPSP request for information in September 2024 to replace its aging Victoria-class submarines slated for decommissioning in the mid-2030s.
The project seeks up to 12 new diesel-electric submarines for the Royal Canadian Navy, with the first new submarine expected to be delivered in or before 2035.
Hanwha Ocean’s KSS-III submarine and TKMS’ Type 212CD submarine were named as the two finalists in August 2025.
Since then, the South Korean firm has partnered with several Canadian entities to strengthen its bid.
It named Babcock Canada as its exclusive in-service support partner and teamed with local firms and Canadian universities to collaborate on subsystems.
Hanwha also held talks in April with Nova Scotia government officials on defense readiness and industrial concerns, and explored a potential cooperation with Irving Shipbuilding, a Halifax-based company involved in several Royal Canadian Navy programs.
