Consultant McKinsey says there is no need for any mergers between South Korea’s top three shipyards – Hyundai Heavy Industries (HHI), Samsung Heavy Industries (SHI) and Daewoo Shipbuilding & Marine Engineering (DSME). All three are going through major restructuring and McKinsey has been tapped to deliver an assessment report on the best way ahead for the trio.
Among suggestions contained in the report is for all three to halve production capacity by 2020 as there is unlikely to be any pick up in demand, something that would trigger even more redundancies and likely militant action among workers. The report will be sent to the CEOs of the three yards later this month.
Clarksons Research president Dr Martin Stopford told Splash last month that current global shipbuilding capacity is at least 30% in excess of what is needed.
“Cutting capacity makes sense,” Stopford said, “but with the market split 37% China, 35% South Korea and 19% Japan it’s a game of chicken for who cuts first and most.”