# HD Hyundai teams with Croatia yard on €660m corvette program *The alliance pairs South Korean combat vessel design with local Adriatic fabrication to bypass European Union defense procurement hurdles.* **Published:** October 11, 2026 **By:** Hyun-jung Lee **Section:** Shipbuilding & Defense — South Korea **Format:** Breaking **Confidence:** medium **Source:** https://eastasiabrief.com/shipbuilding/hd-hyundai-teams-croatia-yard-660m-corvette-program-661 **Publisher:** East Asia Brief (https://eastasiabrief.com/) --- ## What to know - HD Hyundai signs teaming agreement with Croatia's Iskra Shipyard for naval corvettes - Corvette program carries an estimated value between €660 million and €1.6 billion - Croatian defense ministry schedules formal tender requirements for Q2 2027 ![Shipyard workers in hard hats observe a large naval vessel undergoing construction inside an industrial dry dock. (AI-generated image)](https://eastasiabrief.com/media/2026-10-11-1939c10d1f07.webp) *Shipyard workers in hard hats observe a large naval vessel undergoing construction inside an industrial dry dock. (AI-generated image)* HD Hyundai Heavy Industries formalized an agreement with Croatia’s Iskra Shipyard on Oct. 11, 2026, positioning the South Korean shipbuilder to contest European naval tenders. The partnership targets Zagreb’s program to purchase two multirole corvettes. The procurement carries an estimated value between €660 million and €1.6 billion ($720 million to $1.8 billion). That contract value equals roughly 4% to 10% of HD Hyundai Heavy Industries' 17.57 trillion won ($13.1 billion) annual revenue recorded in 2025. The agreement, initialed in Šibenik, establishes an industrial division of labor. HD Hyundai Heavy Industries will deliver basic design, naval engineering and combat systems integration. Iskra Shipyard will carry out hull fabrication and final assembly inside Croatia. This domestic arrangement satisfies European Union procurement standards that mandate local industrial offsets. European defense ministries frequently favor domestic or continental yards. Direct warship exports manufactured entirely in Asian dry docks face acute political resistance across EU capitals. Teaming with a Mediterranean shipyard provides a operational corridor into NATO procurement channels. It also protects South Korean yards against potential regional tariff boundaries and protectionist purchasing mandates. Senior Vice President Kim Jae-rak signed the accord for HD Hyundai Heavy Industries. Chief Executive Roko Vuletić signed on behalf of Iskra Shipyard. Iskra Shipyard operates specialized repair and manufacturing berths in Šibenik. The yard belongs to Slovenia’s Iskra Group, a regional engineering and industrial automation conglomerate. The Croatian builder expanded its heavy industrial footprint by purchasing the 120-year-old 3. MAJ shipyard in Rijeka. That site provides deep-water construction docks capable of handling large combatant hulls. The joint bid will face established European competitors. Spanish state-owned shipbuilder Navantia signed preliminary memorandums with Croatian engineering firm AITAC and Iskra earlier this year. South Korean defense shipbuilders are deliberately altering their overseas marketing formulas. The sector previously relied on direct vessel export deliveries to Southeast Asian and Latin American navies. HD Hyundai Heavy Industries delivered two frigates and two corvettes directly to the Philippine Navy from its Ulsan shipyard. Expanding into Europe requires licensing designs and transferring production steps. The agreement also extends past naval corvettes. The shipbuilders agreed to explore commercial roll-on roll-off passenger ferries, specialized service craft and uncrewed maritime surface vessels. The framework envisions an industrial cluster tying together domestic parts makers, regional technical institutes and local equipment suppliers across the Adriatic coastline. Croatian Armed Forces Chief of Staff Tihomir Kundid said new corvettes will safeguard national maritime sovereignty throughout the Adriatic Sea. The Croatian Ministry of Defence plans to issue the formal corvette tender requirements in the second quarter of 2027. Contract evaluation and bidder selection will run through early 2028. The teaming agreement does not state the exact profit-sharing ratio between the shipbuilders. Croatian authorities have not published the official armaments package or electronics supplier shortlist for the corvettes. ## Impact map | Event | Korea | China | Japan | Global impact | | --- | --- | --- | --- | --- | | Croatia naval corvette procurement | HD Hyundai targets €660m-€1.6b naval program via design and systems export | Chinese shipyards remain locked out of European naval supply chains | Japanese naval builders face higher European entry barriers without local dockyard ties | European naval procurement shifts toward modular technology licensing and local hull fabrication | ## In this story - **Companies:** HD Hyundai Heavy Industries - **Tickers:** 329180.KS - **Exposed:** Navantia, Iskra Group - **Policy:** Economic Security, Subsidies - **Impact:** Supply Chain, Order Book ## Primary sources 1. imarinenews.com 2. navalnews.com 3. eastasiabrief.com 4. asiasis.com 5. g-enews.com --- Cite as: East Asia Brief, "HD Hyundai teams with Croatia yard on €660m corvette program," October 11, 2026. https://eastasiabrief.com/shipbuilding/hd-hyundai-teams-croatia-yard-660m-corvette-program-661