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Hyundai Heavy Industries’ shipbuilding arm in contract for new crude carriers

Korea Shipbuilding & Offshore Engineering is set to win a new contract to build 10 Very Large Crude Carriers as South Korea’s shipbuilding industry grapples with the coronavirus pandemic.

KSOE, which is owned by Hyundai Heavy Industries, is close to securing the order and has signed a letter of intent with Everest Korea Finance Advisory in Seoul to build the ships with various clients, TradeWinds and Yonhap reported Friday.

Each ship is priced at $85 million. Everest Korea, funded by Chinese investment firm Everest Venture Capital, could be seeking a long-term charter contract for the ships and South Korean technicians to advise on shipbuilding, or consulting.

The deal is not final. Only when Everest Korea secures a long-term charter contract for the ships, will it lead to a finalized order, the reports say.

Hyundai Heavy Industries has had a difficult year due to the global economic downturn. The company has yet to reopen its manufacturing center at Gunsan Shipyard in South Korea, KBS reported Wednesday.

The shipyard has been closed for three years amid an industry-wide slump and increased competition from Chinese shipbuilders, but Hyundai could still be interested in acquiring Doosan Infracore, a South Korean machinery manufacturer, according to KBS.

The COVID-19 pandemic has had an impact on Hyundai’s employees, but wage bargaining has resumed between labor and management, according to News 1.

Hyundai’s labor and management met on Thursday to discuss demands, but managers said working hours could be adjusted to address the issue of an “idle workforce,” as building orders have slowed this year.

Hyundai has been successful in recent bids. Last week the company was named the preferred bidder for a domestically developed next-generation destroyer following a controversial court ruling.
Source: United Press International, Inc. (UPI)

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