Lee vows continued support for K-defense industry after loss in Canadian submarine bid

President Lee Jae Myung pledged continued support for the defense industry after Hanwha Ocean lost Canada's submarine procurement project, saying the bid nevertheless demonstrated the competitiveness of Korea's submarine technology.

"Our submarines have proven their outstanding performance and technological capabilities by competing with the world's leading submarine builders," Lee wrote on Facebook on Tuesday, after Canada announced Germany's TKMS as the preferred bidder.

"Although we did not achieve the result we had hoped for in Canada's submarine project, I believe we once again clearly demonstrated our capabilities to the international community."

Lee called the defense sector a "new engine of growth that attracts global attention and a core pillar of national competitiveness" and vowed his support.

"Korea will continue to take on bold challenges," Lee added. "From research and development and export support to stronger international cooperation, we will do everything we can to help our submarines contribute to peace and security around the world."

Canadian Prime Minister Mark Carney announced Monday that Germany’s TKMS was selected to build Canada’s next submarine fleet. Korea's Hanwha Ocean formed a consortium with HD Hyundai Heavy Industries to build the KSS-III Batch II submarine, but failed to win the bid.

Including construction costs and 30 years of maintenance, repair and overhaul services, the project was estimated to be worth as much as 60 billion Canadian dollars ($44 billion), making it potentially the largest single defense export contract in Korea's history.

Korea's Defense Acquisition Program Administration also expressed disappointment, but said the competition was meaningful.

"We respect the Canadian government's decision," the agency said in a statement on Tuesday. "The government and industry prepared thoroughly and did their utmost throughout the bidding process, and we think it is regrettable that the outcome did not meet our expectations."

The agency said the competition underscored how far Korea's submarine technology has progressed.

"Korea, which once imported submarine technology from Germany, competed on equal footing with the country that pioneered the technology in every aspect, including performance and delivery schedules," the agency added. "This demonstrates the remarkable advancement of Korea's defense technology."

The agency also highlighted the voyage of the KSS-III Dosan Ahn Chang-ho, a domestically built 3,000-metric-ton submarine, which crossed the Pacific Ocean during the bidding process to demonstrate its long-range operational capability, endurance and stability.

It said the deployment "served as an opportunity to showcase the capabilities of Korea's defense industry not only to Canada but also to the global defense market."

The agency acknowledged that Korea had been unable to overcome "unfavorable strategic conditions" but said it would use the experience as a stepping stone toward its goal of becoming one of the world's four leading defense exporters. The reference appeared to reflect Canada's emphasis on interoperability within NATO, a factor viewed as one of the main reasons the country selected Germany's TKMS.

The agency also said it would accelerate the adoption of AI across the defense sector to widen its technological edge and pursue more aggressive localization strategies to strengthen its presence in major overseas defense markets.

BY KIM JI-HYE [[email protected]]