Two frigates see HHI sail past its 2018 order target

Industry

Published: 13 Dec. 2018, 20:05

Two frigates see HHI sail past its 2018 order target

Hyundai Heavy Industries Group beat its $13.2 billion annual order target for this year, raising expectations that a lengthy slump in the Korean shipbuilding industry could soon come to an end.

The shipbuilding group said Thursday it inked $13.3 billion worth of orders to build a total of 153 ships this year, beating its original goal before the year’s end. The group consists of Hyundai Heavy Industries and its shipbuilding affiliates Hyundai Samho Heavy Industries and Hyundai Mipo Dockyard.

The latest order was placed by Korea’s Defense Acquisition Program Administration to build two 2,800-ton frigates for the Korean Navy, the company said. The order is worth 633.5 billion won ($564 million).

Construction for the guided missile-mounted warships will begin starting in the second half of 2020. Delivery for the ships is due to be completed by 2023.

Aside from the latest deal, Hyundai has also won orders for 25 liquefied natural gas (LNG) carriers, 15 liquefied petroleum gas carriers, 56 oil tankers, 50 container ships, four bulk carriers and one car ferry this year.

Two other major Korean shipbuilders - Samsung Heavy Industries and Daewoo Shipbuilding and Marine Engineering (DSME) - are also striving to achieve their yearly targets.

DSME announced on Monday that it won an order to build one LNG carrier from Maran Gas Maritime, the gas shipping unit under Greece’s Angelicoussis Shipping Group. The company said it achieved 85 percent of its $7.3 billion annual target with the latest order.

Samsung Heavy Industries is yet quite far off its proposed target, but it’s still making progress. The company announced on Thursday that it inked a 211.2 billion won order to build an LNG carrier from an Oceanian shipper. With the latest order, Samsung recorded $5.5 billion worth of annual orders, roughly 67 percent of its $8.2 billion target.

Though some companies may not reach their proposed targets for the year, Korea is still likely to top the list of countries with the largest annual orders for ships. Korean shipbuilders altogether inked 10.9 million compensated gross tonnage (CGT) of orders as of November, 42 percent of the total orders placed globally, according to data from market tracker Clarksons Research. China is currently in second with 8.74 million CGT, or 34 percent, of global orders.

If Korea tops the list after the December result comes in, it will be the first time in seven years that it has reclaimed its old throne.

BY KIM JEE-HEE [kim.jeehee@joongang.co.kr]