Posted on November 2, 2022
Hyundai Heavy Industries (HHI) has reopened an idled shipyard in the southwestern port city of Gunsan two months ahead of schedule, helping the shipbuilder to accommodate surging newbuild orders.
Presiding over the reopening of the facility, South Korea Prime Minister Han Duck-soo committed the government to continuing to support the shipyard’s competitiveness and to create the potential for growth for the country’s shipbuilding industry.
HHI had initially said that operations at the Gunsan shipyard would resume in January 2023, five years after the facility shut down due to a downturn in the shipbuilding industry.
“The restart of the Gunsan shipyard will further increase our overwhelming global share of high value-added and eco-friendly ships,” said Han, adding that resumption of operations at the shipyard is also expected to boost the economy in Gunsan and its surrounding North Jeolla Province. The yard is expected to generate $1.6 billion in economic activity for the region annually.
After investing $1 billion to construct the Gunsan shipyard on a 450-acre site in 2010, HHI shut down the facility in 2017. At the time of its closure, the shipyard had a workforce of 650 employees.
In February, HHI signed agreements with the North Jeolla provincial government and the Gunsan city government to facilitate the reopening of the Gunsan shipyard. The company committed to hire 750 workers to produce 100,000 tons of blocks for large container ships annually starting in 2023.
South Korean shipbuilders – led by Korea Shipbuilding & Offshore Engineering Co. (KSOE), HHI’s parent company – continue to lead in winning global newbuild orders, which has resulted in a significant surge in order backlog.
KSOE, whose third quarter earnings increased by 64 percent to stand at $222 million, has this year clinched $22.1 billion worth of orders for 186 ships, amounting to 127 percent of its yearly order target of $17.4 billion.
Clarkson Research Service’s data shows that in the first nine months of the year, South Korean shipyards took in 13.2 million compensated gross tons (CGTs) in new orders, or 44 percent of the global total.
During the period, the country’s shipbuilders order backlog stood at 36 million CGTs, accounting for 35 percent of the global total. Only China had a larger backlog at 43.3 million CGT, accounting for 42 percent of the aggregate.
South Korea wants to grow its global market share in shipbuilding to an ambitious 75 percent by 2030. Its government hopes to achieve dominance in a fiercely competitive industry by improving technologies for low-carbon vessels and preparing for the era of zero-carbon vessels, including ships powered by hydrogen and ammonia.