How Chile is Reshaping its Naval Supply Chain

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Chile's new procurement policy boosts domestic shipbuilding (Credit: ASMAR)
Chilean shipbuilding has entered a new era, with President Boric's policy prioritising domestic production, transforming defence supply chains

Chile's naval supply chain is transforming as the nation pivots towards domestic production for its fleet renewal program.

The strategic realignment, initiated by President Gabriel Boric at the Asmar shipyard in Talcahuano, signals a fundamental restructuring of the country's maritime defence supply chain, moving away from international procurement towards local manufacturing capabilities.

Building a domestic supply network

The Chilean government's approach involves coordinating multiple stakeholders across the supply chain.

In June 2022, the coordination manifested when President Boric directed the Ministries of Defence and Economy, alongside the Chilean Navy, to develop a comprehensive policy framework. The framework aims to consolidate naval construction activities within domestic shipyards, effectively reshaping the entire supply chain ecosystem.

Rear Admiral José Miguel Hernández, Director of Asmar

Rear Admiral José Miguel Hernández, Director of Asmar, highlights the ambitious scope of the supply chain transformation: "Asmar has tremendous experience in shipbuilding and it has been building auxiliary ships of different types for more than 60 years. But we want to build our frigates in the next decade. We will be responsible for the detailed engineering and construction of the frigate."

He acknowledges the need for strategic partnerships, adding: "However, we also require collaboration with associated companies for the integration of necessary systems."

The policy has already demonstrated its impact through the Escotillón IV project, which involves the construction of four multipurpose vessels.

The project serves as a practical test case for the new domestic supply chain model, with the first vessel approaching completion at Asmar's facilities and scheduled for sea trials this year.

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Vertical integration and capability development

The supply chain transformation extends beyond mere assembly operations. Chile's successful delivery of the icebreaker Almirante Viel showcases the nation's growing capability to manage complex manufacturing processes domestically.

The vertical integration of shipbuilding capabilities positions Asmar as a regional leader in maritime manufacturing.

President Boric highlights the strategic importance of this supply chain transformation: "This means that with this we are ratifying our naval vocation. Chile has one of the longest coasts in the world. We are the only tricontinental country and we also have an Antarctic vocation and we intend that our country be understood as the natural gateway to it."

Supply chain resilience through local manufacturing

Asmar's role as a state-owned enterprise is crucial in this supply chain transformation.

Rear Admiral Hernández outlines the operational implications: "For Asmar, it is a tremendous challenge to sign the shipbuilding policy because it allows us to generate shipbuilding plans and with this to be able to renew both auxiliary and surface units of the Navy."

He continues about the long-term benefits: "This continuous shipbuilding plan undoubtedly gives us the experience and know-how to be able to build these frigates that is a desire of the institution."

(Credit: Chilean Navy)

Economic impact and supply chain sovereignty

Chile's naval supply chain restructuring aims to generate significant economic benefits by developing local supplier networks and technical expertise.

President Boric highlights this: "Signing this policy is important for Chile's sovereignty. The policy will help the country rely less on foreign shipyards and build essential defence ships at home."

The transformation represents a comprehensive approach to supply chain sovereignty, combining domestic manufacturing capabilities with strategic partnerships.

By establishing a robust local supply chain for naval vessel construction, Chile is enhancing its defence capabilities and creating a sustainable model for domestic maritime manufacturing excellence.


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