While the Korean government and business sectors are waging an all-out effort to win Canada’s next-generation patrol submarine procurement project (CPSP) worth up to 60 trillion won, the two countries have signed an agreement to promote Korean automotive companies’ investment in Canada.
Minister of Trade, Industry and Resources Kim Jung-kwan signed a memorandum of understanding (MOU) with Canadian Minister of Industry Mélanie Joly in Ottawa, Canada, on Jan. 27 (local time) to attract Korean automotive industry manufacturing and investment to Canada.
The memorandum of understanding centers on the commitment that Korea and Canada will cooperate to promote the manufacturing of automobiles, electric vehicles, batteries, and hydrogen vehicles. The agreement states that the two countries will cooperate to expand the presence of the Korean automotive industry in Canada and explore electric vehicle manufacturing opportunities” and “expand battery manufacturing presence and cooperate across the entire battery supply chain including manufacturing, key mineral mining and refining, and research and development.”
Additionally, the agreement includes cooperation on hydrogen commercial vehicles and the establishment of stable hydrogen supply chains. The establishment of a hydrogen ecosystem in Canada was proposed by Hyundai Motor Group, which is the main entity for automotive industry cooperation between Korea and Canada.
The CPSP project is an initiative to introduce 12 submarines of 3,000-ton class to replace four 2,400-ton Victoria-class submarines that Canada introduced from the British Navy in 1998. When construction and maintenance costs are combined, the project scale is estimated to reach up to 60 trillion won.
Hanwha Ocean, which is leading the bid competition, has decided to contribute 345 million Canadian dollars (approximately 360 billion won) to build a steel plant with Algoma Steel, Canada’s largest steel company, and purchase steel materials for submarine construction and maintenance.
Regarding this, Prof. Karl Skogstad of Lakehead University, a Canadian defense economics expert, evaluated that “the decision to not only purchase steel from Canadian factories but also invest in the facilities themselves is a very strategic choice” and “shows how serious Hanwha Ocean is about securing Canada’s submarine business.”
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