Korean shipyards brace for another tough year

The CEOs of South Korea’s top three shipyards have given their new year’s addresses to employees and have warned of another tricky 12 months ahead.

Kang Hwan-Gu, CEO of Hyundai Heavy Industries (HHI), warned: “Competition is expected to become even more intense this year, as signs of recovery are not seen in major industries such as shipbuilding and offshore plants.”

HHI’s sales target for this year has been cut to a level not seen for a decade.

Samsung Heavy Industries CEO Park Dae-Young, meanwhile, was blunt in his assessment of prospects this year, saying: “There is nothing more important than survival. We should continue to streamline our management process in accordance with the market conditions and our self-rescue plans.”

Daewoo Shipbuilding & Marine Engineering CEO Jung Sung-Leep admitted, “The last year was the biggest crisis since the foundation of the company.” Jung expected to see some small improvements in shipping and offshore orders this year. Like his peer at HHI, Jung warned the paucity of new orders would result in extreme competition among the major yards.

“The issues that need to be solved internally are securing liquidity, expanding new orders, improving profitability, and stabilizing production through organizational restructuring,” the DSME boss said.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.
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