The private giant that operates key defence facilities in Scotland has hailed a major agreement that will centre on the future of conventional submarine warfare.

It comes after another UK defence heavyweight, also with key facilities north of the Border, signed a £103 billion deal for NATO-compatible battle equipment from the same South Korean company.

Babcock International, which employs 3,500 people in Scotland including at Rosyth dockyard in Fife and Faslane submarine base near Helensburgh, has signed a memorandum of understanding with Seoul-based major Hanwha Aerospace "with an initial focus on opportunities to cooperate on conventional submarines".

The broad aim is to offer "enhanced capabilities across land, air and sea domains".

Babcock is also working with Hanwha on its weapon handling system for the Korean submarine programme and has strong existing relations with Hanwha Ocean through joint work on globally-focused submarine projects including those in Poland and the  Philippines.

The Herald: Babcock earlier hailed its Scottish operations, such as FaslaneBabcock earlier hailed its Scottish operations, such as Faslane (Image: Colin Mearns)

The firm this week closed a £103 billion deal with BAE Systems, which is building eight frigates at its Scottish shipyards at Govan and Scotstoun, to provide it with NATO-compatible shell charges.

Hanwha Aerospace said it is "strengthening strategic partnerships with Britain’s global top-tier defence companies", adding: "The plan is to expand all-round cooperation in the defence industry with the United Kingdom, a liberal ally, by supplying charges for 155 mm artillery shells, whose demand is rapidly increasing due to the recent global geopolitical crisis."

The charge is loaded behind the warhead and uses explosive force to blow the warhead out of the gun barrel at a set range.

Elsewhere, Prestwick Airport was boosted by military flights as it unveiled a fourth consecutive annual profit. Business editor Ian McConnell focused on the airport in his Called to Account column this week.

"Given it is a valuable strategic asset employing hundreds of people directly and supporting thousands of jobs in all, you might be forgiven for thinking there would be a ubiquitous desire to see Prestwick Airport succeed," he writes. "Sadly not, however. Much of the time antipathy towards Prestwick Airport, where it exists, appears to be all tied up with individuals’ political beliefs, around the constitution or the SNP or both, given its ownership by the Scottish Government."

The Herald: A new hotel is to open a city centre landmark. See below.A new hotel is to open a city centre landmark. See below. (Image: Carlo Paloni)

When the history books come to record the battle between Dame Alison Rose and Nigel Farage, they will surely show there was only one winner, deputy business editor Scott Wright writes. Farage, the former UKIP leader who played a key role in securing the vote for Brexit in 2016, is spending the tail end of 2023 on a reality TV show in Australia.

"Dame Alison, on the other hand, will end the year in far less triumphant fashion. A year that started on such a high – the banker received a damehood for services to financial services in the King’s first New Year Honours – will likely end with Dame Alison without a high-profile job," he writes.

Also this week, business correspondent Kristy Dorsey reports that family-owned Irish hotel group The Address Collective is to open a new luxury site in Scotland's largest city early next year that will create around 80 new jobs.

Originally designed for Lancashire Insurance Company in the 1890s, the property has received a £9 million makeover.

Owner Brian McGettigan said: "We’ve chosen Glasgow because we love the people, the culture and can’t wait to raise the bar for luxury stays in Scotland."