HD Hyundai may nearly double shipbuilding capacity in Vietnam

HD Hyundai Co., the world’s second-largest shipbuilder, is likely to nearly double its vessel construction capacity in Vietnam to meet the surging demand.

HD Hyundai Mipo Co., a shipbuilding unit of the South Korean shipbuilding and machinery conglomerate, on Thursday unveiled a plan to raise the capacity of the shipyard in Vietnam to 15 vessels a year from the current 12 units. The company aims to improve the production efficiency of its subsidiary HD Hyundai Vietnam Shipbuilding Co. instead of adding more docks for the plan.

HD Hyundai Mipo is also considering further expansion of the capacity to 23 vessels a year, which may require new docks, by 2030 to win orders to build oil tankers and other ships, for which it competes with Chinese rivals.

The company formerly Hyundai Mipo Dockyard Co. declined to comment on how much it would invest in the increase.

SHIP PRICES TO REBOUND
HD Korea Shipbuilding & Offshore Engineering Co. (HD KSOE), HD Hyundai’s intermediate holding firm for the group’s shipbuilders including HD Hyundai Mipo, expected vessel prices to rebound, saying that the recent setback was short-lived.

Clarksons Research said its newbuilding price index, a key gauge of the global shipbuilding sector, dipped to 189.64 on Oct. 25 from 189.96 in the previous week, a notch lower than the all-time high of 191.6 recorded in September 2008.

Shipping companies reduced orders for liquefied natural gas (LNG) carriers, putting pressure on the index, as natural gas development projects across the world have been delayed. The move raised expectations of an oversupply of LNG carriers, cutting fares for the tankers.

HD KSOE defied such views, predicting growth in LNG tanker demand.

The leading South Korean shipbuilder said the escalating geopolitical tensions are expected to tighten the global energy supplies, keeping demand for oil and gas shipping strong through 2050.

That will raise new ship prices for the long term, HD KSOE added.

The company said its operating profit soared by more than five times to 398.4 billion won ($289.3 million) on a consolidated basis in the third quarter from a year earlier as sales grew 24.6% to 6.2 trillion won.
Source: The Korea Economic Daily