South Korean defense firm Hanwha has signed a memorandum with Canadian steel producer Algoma Steel and Canada's Automotive Parts Manufacturers' Association (APMA) to supply Canadian steel for the prospective manufacturing of armored land vehicles in Canada, a partnership that would feed domestic steel into a fleet built for the Canadian Armed Forces and for export to allies, according to media reports. No supply volumes or dollar figures tied to the defense vehicle steel were disclosed.
The arrangement expands on a partnership Hanwha struck in April with the APMA, a prospective joint venture to build military land vehicles. Hanwha is proposing to produce a range of equipment, including mobile howitzers and infantry vehicles, all manufactured in Canada using domestic steel. Flavio Volpe, APMA president, estimated the resulting activity would be equivalent to one new auto plant, supporting roughly 15,000 direct jobs and another 15,000 indirect.
Both agreements are contingent on Hanwha winning the federal contract to supply the Royal Canadian Navy with a fleet of up to 12 submarines, a procurement valued in the tens of billions of dollars. The South Korean firm is competing against Germany's TKMS. Prime Minister Mark Carney has said his government will decide between the two bids by the end of the month.
Glenn Copeland, CEO of Hanwha Defence Canada, said vehicle production planning would begin immediately if the company secures the submarine contract.
The announcement was made at a Martinrea International facility in Vaughan, Ontario, alongside a high-level South Korean delegation, including the president's chief of staff, who framed the commitment as a complete Canadian supply chain from raw material to finished vehicle.
In January Algoma Steel permanently shut its blast furnace, ending 125 years of coal based integrated steelmaking, and now produces all of its liquid steel through a new electric arc furnace platform expected to reach annual raw steel capacity of about 3.7 million tons once fully ramped. The company has concentrated its commercial strategy on plate, where its sole-producer status gives it a unique position, while scaling back coil output. Plate sales reached a record 116,000 net tons in the first quarter of 2026.
For Algoma, the agreement offers a potential lifeline. The company posted a net loss of C$159.4 million in the first quarter of 2026 on revenue of C$296.9 million, down from C$517.1 million a year earlier, as the electric arc furnace transition cut shipments 52.4 percent and the US Section 232 tariff on Canadian steel, now at 50 percent, added C$27.4 million in direct costs. Algoma accepted a C$500 million loan from the provincial and federal governments late last year and subsequently announced the layoff of roughly 1,000 workers.