South Korean defence firm Hanwha Corp and Algoma Steel Ltd. are discussing a partnership to build military land vehicles using Canadian steel [1, 2].
The potential agreement marks a strategic move by Hanwha to embed itself within the Canadian industrial landscape. This effort comes as the company seeks to expand its defence footprint in North America while awaiting the results of a multibillion-dollar submarine contract award [1, 2].
The discussions, highlighted in a report on Monday, June 1 [3], center on the supply of materials from Algoma Steel's operations in Ontario [2]. By sourcing steel locally, Hanwha could potentially streamline its production chain for land-based military assets, and align with regional procurement preferences [1, 2].
This collaboration is part of a broader ambition to secure a long-term presence in the Canadian market. The company is currently navigating a competitive landscape for naval contracts, making the exploration of land vehicle production a complementary path to growth [1].
Algoma Steel, based in Ontario, would provide the raw materials necessary for the construction of these vehicles [2]. The partnership remains in the discussion phase as both entities explore the feasibility of the arrangement [1, 2].
“Hanwha is discussing a possible partnership to build military land vehicles using steel supplied by Algoma Steel.”
This potential partnership suggests Hanwha is employing a diversification strategy to reduce risk. By pursuing land vehicle production through local sourcing while simultaneously bidding for a major naval contract, the firm is attempting to establish multiple points of entry into the Canadian defence sector, thereby increasing its leverage and industrial footprint regardless of the submarine contract's outcome.
