HHI sets ambitious goal for orders despite slump

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HHI sets ambitious goal for orders despite slump

Despite the prospect of an even tougher year ahead, Hyundai Heavy Industries said yesterday it is targeting $29.7 billion worth of orders this year, up 52.3 percent from 2012 in order to reclaim its reputation as the world’s largest shipbuilder.

Last year, the world’s largest shipyard won $19.49 billion worth of orders, dropping 23 percent on-year due to the global economic slump.

The shipbuilder set its target sales at 26.86 trillion won, up 7.1 percent from last year. Its sales marked 25.09 trillion won last year, rising 0.27 percent on-year.

According to a report by the Institute for International Trade yesterday, Korea’s total ship exports plunged 28.2 percent on-year in the first 10 months of last year amid the global recession, with China believed to have emerged as the world’s No. 1 ship-exporting nation last year.

Korean ship exports reached $33.5 billion in the January-October period, down 28.2 percent from a year earlier, marking the first decline in annual exports since 1999 when the local shipbuilding sector marked a 6 percent drop. It was the worst record for the Korean shipbuilding industry in 13 years.

Meanwhile, China’s ship exports reached $33.6 billion during the same period, down 5.9 percent on-year, the report said.

In comparison, Korean shipbuilders won mostly low-priced vessels last year, which reduced the value of the total ship exports, the report noted.

Another reason was that European customers sharply reduced orders for new ships as the euro zone debt crisis deepened throughout the year. Korean shipbuilders have been heavily reliant on European shippers.

According to the report, the country’s ship exports to the European region accounted for 29.6 percent of the total last year, compared with China’s 14.4 percent and Japan’s 13.2 percent.

Market experts predict local shipbuilders will see 4 percent growth in exports this year as they are moving to build high-priced ships such as drill ships and offshore facilities.

“New ship orders, order backlogs and other barometers will not improve sharply this year, but we can expect a mild recovery,” said Cho Sang-hyu at the institute.

By Song Su-hyun, Yonhap [ssh@joongang.co.kr]
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