Europe’s rearmament boosts demand for naval vessels, opening an opportunity to rebuild Greek shipbuilding
Hanwha Ocean technology and ONEX facilities to be combined for local construction
Hopes rise for long-term work and a recovery in manufacturing employment

Greece is accelerating cooperation with South Korea to rebuild its shipbuilding industry. Its plan is to incorporate Hanwha Ocean’s technology and shipbuilding experience into domestic shipyards to win more naval vessel orders and revive manufacturing and employment. As European countries bolster their defense capabilities, rising demand for naval vessels is giving Greek shipyards an opportunity to secure long-term work. U.S. funding for shipyard modernization, aimed at countering China’s influence over ports in the eastern Mediterranean, is also helping restore production capacity.

Hanwha Ocean and ONEX Jointly Target Greek Naval Vessel Projects

According to the Greek business newspaper Naftemporiki on the 15th (all dates hereafter are local time), the Greek shipyards association met with a special European Commission delegation on the 13th and submitted a seven-point strategy that includes formally establishing a 70% domestic value-added requirement. Ahead of Greece’s assumption of the presidency of the Council of the EU in the second half of next year, the plan is to create conditions for domestic shipyards to participate as prime contractors responsible for everything from design to construction, sea trials and follow-on support. To that end, the association asked for a national shipbuilding plan covering 15-year periods to be institutionalized, and for local production and infrastructure expansion achievements to be reflected in the criteria for disbursing European defense industry support funds. Its requests also included revising procurement rules to ensure that 70% of the value added generated during naval vessel construction remains in Greece, and providing funding for production facilities such as docks and ship lifts.

On international cooperation, the association proposed a goal of restoring the West’s share of global shipbuilding to 33% through a joint production framework involving Greece, Europe and the United States. It cited the partnership between Greek shipbuilding group ONEX and Hanwha Ocean as a model for diversifying construction work concentrated in Asia and strengthening Western supply chains. Their cooperation took concrete shape through a strategic alliance agreement in May, following a March agreement to jointly participate in Greek Navy and Coast Guard projects. Under the arrangement, ONEX will pursue phased investments totaling EUR 1.35 billion (approximately USD 1.56 billion) in shipyard infrastructure, while Hanwha Ocean will provide advanced technology and shipbuilding expertise. Part of the investment is to be financed with support from the U.S. International Development Finance Corporation (DFC), and the companies agreed to pursue local construction and maintenance, repair and overhaul (MRO) projects for vessels belonging to the Greek Navy and allied countries.

Hanwha Technology to Expand Greece’s Naval Vessel Construction and Maintenance Capacity

The companies’ first target is the Greek Navy’s submarine procurement program. Hanwha Ocean and ONEX agreed to serve as mutually exclusive partners for Greek Navy and Coast Guard vessel projects, including that program. ONEX operates the Neorion Shipyard on the island of Syros and the Elefsina Shipyard near Athens. Elefsina, in particular, has been modernizing its facilities with U.S. financial support. In November 2023, the DFC signed a loan agreement worth USD 125 million (approximately USD 128 million) with ONEX to support expanded ship repair and conversion capabilities, including for liquefied natural gas (LNG) carriers. The facility improvement target announced at the time was the capacity to handle up to 200 vessels annually.

Cooperation between Hanwha affiliates and ONEX is also underway in energy facilities and shipyard productivity improvements. On February 25, before Hanwha Ocean signed its agreement, Hanwha Power Systems entered into a shipbuilding and energy cooperation agreement with ONEX in Washington, D.C. The scope includes the development of newbuild vessels capable of using LNG as fuel, offshore and nearshore regasification facilities, and projects involving energy production and storage facilities. In shipyard operations, the companies agreed to improve newbuild construction processes and workflows and to increase equipment procurement efficiency by using Hanwha’s global supplier network and purchasing systems. They also plan to strengthen coordination between technical support and procurement to accelerate contract signing and project execution. In addition, the companies agreed to pursue the joint expansion of marine energy-related production and facility integration projects in the United States.

A Relationship Forged by the First Tanker Order Evolves Into Cooperation on Rebuilding Shipbuilding

Shipbuilding cooperation between South Korea and Greece dates back half a century to a relationship that helped launch Korea’s large-scale shipbuilding industry. In 1972, Greek shipowner George Livanos ordered two 260,000-ton very large crude carriers from Hyundai Heavy Industries before the Ulsan shipyard had even been built. The order provided a foundation for securing the funds needed to construct the shipyard, and Hyundai began building the vessels alongside the yard itself. The first vessel, the Atlantic Baron, was delivered in November 1974, marking Korea’s entry into the global shipbuilding market. A partnership that began with a Greek shipowner entrusting early orders to Korea is now expanding to include projects that bring Korean companies’ technology and production experience to the rebuilding of Greek shipyards.

Greece’s hopes for rebuilding shipbuilding are driven by a desire to revive manufacturing and local employment after a prolonged decline. Greek shipyards built and repaired hundreds of vessels in the 1960s and 1970s, but their production base weakened amid the economic slowdown and nationalization of the 1980s and the subsequent fiscal crisis. As privatization was delayed or fell through, work moved overseas, and areas near Athens with concentrations of shipyards and suppliers also suffered unemployment. More recently, private investors and shipowners have become involved in shipyard operations, spurring efforts to bring repair work on Greek-owned vessels back home. Greece’s annual ship repair volume rose from 330 vessels in 2013 to around 700 in 2024, while the two ONEX-operated shipyards repaired 220 vessels in 2024. Building on this recovery in repair work, the local industry is expanding into newbuild vessels and offshore facilities.

Table 1. European, U.S. and Chinese Moves Surrounding the Rebuilding of Greek Shipbuilding

European Naval Demand and U.S. Funding Give Momentum to Greece’s Shipbuilding Revival

European naval vessel orders are seen as a source of long-term work for a production base revived primarily through ship repair. Across Europe, efforts to strengthen national defense capabilities have recently been accompanied by investment in acquiring existing shipyards for use as warship production facilities. On the 9th, German defense company Rheinmetall agreed to acquire Romania’s Mangalia Shipyard for EUR 138 million (approximately USD 159 million) and is pursuing plans to build four vessels for the Romanian Navy there. The EUR 920 million (approximately USD 1.06 billion) project, comprising two offshore patrol vessels and two support vessels, is linked to SAFE (Security Action for Europe), the EU’s defense loan support program. This trend of naval orders going hand in hand with investment in production facilities is seen as supporting the Greek industry’s efforts to expand domestic shipyards’ participation in European defense projects.

Alongside European demand for naval vessels, U.S. financial support is helping Greece rebuild its shipbuilding industry. Greece’s aim of restoring its production base aligns with the U.S. goal of countering China’s influence over ports in the eastern Mediterranean. Chinese state-owned shipping company COSCO secured management control of the Port of Piraeus operator in 2016, during Greece’s fiscal crisis, and subsequently increased its stake to 67%. Piraeus is a major logistics hub linking Europe, Asia and Africa, and the United States is seeking to counter China’s influence through investments in nearby ports and industrial facilities. In explaining its support for Elefsina Shipyard, the DFC also highlighted its location approximately 19 km from the Port of Piraeus and explicitly stated that its funding had helped counter China’s expanding influence in the region. The United States has also shown interest in acquiring stakes in smaller Greek ports and is pursuing both increased energy exports to Europe and access to port infrastructure.

A Foothold for Hanwha Ocean’s Expansion Into Europe

U.S. support that improves investment conditions at Greek shipyards also benefits Hanwha Ocean as it seeks to establish a local production base. Access to existing shipyard facilities, workers experienced in ship repair and nearby suppliers could reduce the burden during the early stages of the business. Greece’s relatively low labor costs are also cited as an advantage of local production. European statistics put Greece’s hourly labor costs at around EUR 18 (approximately USD 20.73) in 2025, roughly half the EU average of EUR 34.9 (approximately USD 40.19). Although the figures are not specific to shipbuilding, they provide an indication of the cost burden of operating a production base in Europe. Hanwha Ocean could therefore expect to secure production competitiveness by combining the local industrial base with its shipbuilding technology and process management experience.

Europe’s push to strengthen regional defense production and procurement also increases the value of a Greek base. In principle, SAFE limits the share of component costs for eligible equipment sourced from outside the EU, European Free Trade Association countries within the European Economic Area, and Ukraine to no more than 35%. Since it also examines participating companies’ locations and ownership structures, having both local production systems and supply chains has become important for entering the European defense market. Joint construction with ONEX would give Hanwha Ocean scope to increase its use of European-made equipment and expand cooperation with local suppliers. The company is expected to be able to operate its Greek production facilities in line with European procurement standards while incorporating contributions to local employment and industry into its bids.