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(News Focus) Midsized shipbuilders' orders bounce back after finalizing their sale deals

10:49 November 26, 2021

By Nam Kwang-sik

SEOUL, Nov. 26 (Yonhap) -- New orders for ships won by South Korea's midsized shipbuilders more than doubled in the first 10 months of the year from a year earlier after finalizing their sale deals, industry data showed.

The three midsized shipbuilders -- Hanjin Heavy Industries & Construction Co., STX Offshore & Shipbuilding Co. and Daesun Shipbuilding Engineering Co.-- were put up for sale last year to cope with their financial difficulties since the 2008 global financial crisis.

But the sales had been hampered by a slump in the shipbuilding industry and the COVID-19 outbreak.

As the shipbuilding industry started recovering from its slump this year, the midsized shipbuilders have completed their sale deals and posted robust performances in bagging new orders for ships, according to data by the Ministry of Trade, Industry and Energy.

Daesun Shipbuilding Engineering was sold to local steelmaker Dongil Steel Co. at the end of last year, while local builder Dongbu Corp. took over Hanjin Heavy Industries & Construction in April.

STX Offshore & Shipbuilding was acquired by a local consortium comprising local private equity fund KH Investment and United Asset Management Co., South Korea's biggest bad debt clearer, in July. STX Offshore & Shipbuilding was renamed K Shipbuilding Co. following the conclusion of the acquisition.

This file photo provided by STX Offshore & Shipbuilding Co. on June 30, 2021, shows the shipbuilder's shipyard in Jinhae, 410 kilometers southeast of Seoul. (PHOTO NOT FOR SALE) (Yonhap)

Among the three shipbuilders, K Shipbuilding posted the strongest performance in the January-October period.

Compared with the same period a year ago, K Shipbuilding's new orders rose nearly fourfold to 333,000 compensated gross tons (CGTs).

The shipbuilder bagged an order for a 50,000-ton petrochemicals carrier in March.

Three months later, K Shipbuilding signed deals to build 12 ships with Oceanian companies in June, which include two 10,000-ton petrochemical carriers (PCs), six 50,000-ton PCs and four 115,000-ton oil tankers.

The deal for four oil tankers has an option to construct two additional oil tankers.

In October, the midsized shipyard also joined forces with Kongsberg Digital AS, a Norwegian company that has technology for autonomous ships, to narrow the technology gap with large shipbuilders in the area of smart ships with its autonomous navigation system called K-ADIS, or K Shipbuilding Advanced Intelligent Solution.

This file photo, provided by Daesun Shipbuilding Engineering Co. on Dec. 29, 2020, shows a shipyard of the shipbuilder in Busan, 453 kilometers southeast of Seoul. (PHOTO NOT FOR SALE) (Yonhap)

In particular, Hanjin Heavy Industries & Construction obtained a 310.5 billion won (US$261.4 million) order to build four container carriers in October, which was the first order for commercial vessels in six years.

Hanjin Heavy failed to win orders for ships in 2020.

Daesun Shipbuilding Engineering won new orders of 250,000 CGTs in the January-October period, more than double from a year ago.

The shipyard struck a deal with Samsung Heavy Industries Co., one of the big three local shipbuilders, to receive technological support for smart ships in July.

Another midsized shipbuilder Daehan Shipbuilding Co. achieved its annual target order of 14 ships in September, bagging new orders for 15 ships.

Along with the four midsized shipbuilders' performance, all local midsized shipbuilders' new orders rose nearly threefold in the first 10 months of the year, compared with the same period a year ago, said the ministry in a statement released a week ago.

The robust results came from the government's program to support the midsized shipbuilders in areas of ship design and technology manpower cultivation, the ministry said.

ksnam@yna.co.kr
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