Hyundai Heavy Industries Secures $462 Million Contract to Build Warships for Peruvian Navy

Hyundai Heavy Industries (HHI) , a South Korean shipbuilder, has won a $462 million (640.6 billion won) contract to jointly produce four warships for the Peruvian Navy. The deal, signed between HHI and Peru's state-owned shipyard SIMA, marks Korea's largest-ever defense export to Latin America.

Under the contract, HHI will work with SIMA to build a 3,400-ton frigate, a 2,200-ton offshore patrol vessel, and two 1,400-ton landing craft utilities at the Peruvian shipyard. The project is set for completion by 2030, with HHI taking the lead in design, equipment supply, and technological support, while SIMA handles the ship construction.

The signing ceremony, held in Lima on April 16, 2024, was attended by Peruvian President Dina Boluarte, Prime Minister Alberto Otárola, Defense Minister Jorge Chávez, and other high-ranking government officials, as well as representatives from the Republic of Korea , including the head of HHI's naval and special ship business unit, Joo Won-ho.

President Boluarte described the deal as a "historic milestone" for Peru, as the warships will enhance the Peruvian Navy's combat capabilities, allowing it to better patrol the high seas, strengthen national defense, and provide emergency assistance. The construction of the ships in Peru also provides an opportunity for technology transfer and the development of the local shipbuilding industry.

Why this matters: This contract secures HHI's position as a strategic partner with the Peruvian government and Navy for the next 15 years. The company has also secured the status of a preferred negotiator for the Peruvian Navy's expected project orders for five frigates, three offshore patrol vessels, and two landing craft utilities, potentially leading to further defense exports for Korea to Latin America.

The $462 million deal represents a significant win for HHI in the international shipbuilding market and demonstrates the company's efforts to diversify its business beyond traditional shipbuilding. The joint production of the warships is expected to modernize the Peruvian Navy's fleet and strengthen its defense capabilities. The contract was made possible through the collaborative efforts of various Korean government bodies and the private sector, highlighting the importance of international cooperation in the defense industry.

Key Takeaways

• HHI wins $462M contract to build 4 warships for Peruvian Navy, largest defense export to Latin America.
• HHI to lead design, equipment, and tech support, while Peruvian shipyard SIMA handles construction.
• Deal marks a historic milestone, enhancing Peruvian Navy's combat capabilities and developing local shipbuilding.
• Contract secures HHI's position as a strategic partner for Peruvian Navy's future project orders.
• Collaboration between Korean government and private sector enabled the contract, highlighting international cooperation.