In search of a future, HHI will set up an R&D centerHyundai Heavy Industries aims to make itself smarter by establishing a joint research and development center that will gradually shift the company from manufacturing to technology.
According to the shipbuilder Thursday, it signed a memorandum of understanding with Seongnam city in Gyeonggi to build a R&D center there. The company’s technological hub will work on basic research for product advancement and also find new sources of profit by patenting technologies related to shipbuilding such as enhanced ship navigation systems or eco-friendly shipbuilding systems.
“Shipbuilding has been one of the traditional manufacturing industries but we aim to add more ICT-related products and services to our business portfolio to prepare for future changes in the market,” a spokesperson from HHI said.
The plan comes after the shipbuilder’s announcement last month to split the company into six independent units. The company will place shipbuilding, offshore plants and engines under a single unit while spinning off construction equipment, green energy, robots and service units.
The R&D center will guide all six companies. Researchers from each subsidiary will join the center, although exact numbers and the timing has not been decided.
“In a rapidly changing business environment, all companies are scrambling to secure future sources of competitiveness through technological innovation,” the company said in a statement. “With efficient management of our existing human resources and technology, we aim to build up a new image for HHI.”
The shipbuilding unit of the company will also establish a technology/ICT strategy and planning team as an internal command center for technology-centered business. The new division will plan out strategies to implement technologies developed through the R&D center.
A dearth of orders in the global shipbuilding market due to overcapacity and slow increases in trading volume has forced shipbuilders to restructure their businesses to be more innovative and efficient.
While the spin-off of non-shipbuilding units of HHI will be completed around May, the establishment of the R&D center in Seongnam, Gyeonggi will be completed by 2020.
Meanwhile, the shipbuilder announced 1.38 trillion won ($1.17 billion) in earnings for November on Thursday. That is a 28.29 percent decline compared to the previous year. Accumulated revenue for the year through November was 17.8 trillion won, a 20.46 decline year on year.
Shares of HHI on the same day dipped 0.98 percent to close at 152,000 won.
BY KIM JEE-HEE [email@example.com]