Hanwha Ocean All but Wins Thai Navy Frigate Order

Hanwha Ocean (042660.KS) has all but been selected to build the Thai navy's next-generation frigate.

The Thai navy posted a notice on the government's electronic procurement system on the 8th naming Hanwha Ocean as the winning bidder for a contract to build one frigate.

The proposed price is 16.73 billion baht, or about 680 billion won, including value-added tax, shipping and all other costs.

Internal government approval is also in its final stage. In a statement the same day, a Thai navy spokesman said Prime Minister Anutin Charnvirakul signed the evaluation report on the 4th and that final approval came from the deputy defense minister on the 7th. Given that an appeals process under local procurement law is still under way, however, the navy decided to hold an official briefing explaining the selection criteria and evaluation results on the 18th.

The spokesman did not disclose the name of the selected company at the briefing, citing the pending appeals process, but the winning-bidder notice posted on the government's electronic procurement system that day listed Hanwha Ocean as the final choice.

The Thai navy is procuring one 4,000-ton next-generation frigate. Including follow-on orders, the total contract could reach as much as 4 trillion won. Local media report that the navy is pursuing a modernization drive aimed at securing eight frigates but currently has only four operational vessels.

Six shipbuilders and defense contractors from four countries competed for the order, including Hanwha Ocean and HD Hyundai Heavy Industries along with firms from Singapore, Spain and Turkey. Hanwha Ocean highlighted the strong operational record of the 3,700-ton frigate HTMS Bhumibol Adulyadej, which its predecessor Daewoo Shipbuilding & Marine Engineering delivered to the Thai navy in 2018. Building on that vessel, it proposed an upgraded 4,000-ton export model, the OCEAN-40F, and was chosen.