Yeongam, South Jeolla Province -- On Aug. 14, workers at Hyundai Samho Heavy Industries Co.'s shipyard were meticulously inspecting the cargo hold on a liquefied natural gas (LNG) carrier moored to the quay wall for interior construction. Once completed, the cargo hold, welded by robots, will be filled with LNG.
At the shipyard, three docks along the southwest coast of the Korean Peninsula, one onshore drying facility and six goliath cranes were also full of ships.
“With three and a half years of work piled up, working safely and quickly is our top priority these days,” Lim Yoon-sun, a senior manager of Hyundai Samho, told The Korea Economic Daily.
ORDER TARGET EXCEEDED
Hyundai Samho is the only South Korean shipbuilder with orders received already exceeding this year's target. Year-to-date, it has bagged $5.83 billion worth of orders, more than twice this year's target of $2.6 billion set at the end of last year.
In all of 2022, it secured a total of $8.6 billion worth of orders.
An oil tanker built by Hyundai Samho Heavy Industries (Courtesy of Hyundai Samho) By comparison, its two sister companies under HD Korea Shipbuilding & Offshore Engineering Co. (KSOE) – HD Hyundai Heavy Industries Co. and Hyundai Mipo Dockyard Co. – have achieved 56% and 80% of their targets so far this year, respectively.
Samsung Heavy Industries Co. and Hanwha Ocean Co., formerly Daewoo Shipbuilding & Marine Engineering Co., have secured slightly more than half their targets so far this year.
With the thick order book, Hyundai Samho focuses on high-value vessels such as LNG and LPG carriers, as well as container ships. They account for 32 of the 34 vessels it has bagged in new orders this year.
The string of the new orders is reinvigorating Yeongam-gun, a province with a population of 53,052 as of end-2022. Including some 3,000 foreign employees working at the Hyundai Samho shipyard, its population must be even higher now.
In 2021, the province’s population had plummeted to 52,000, hit by the shipbuilding industry slump, compared to about 60,000 a decade earlier.
An LNG carrier built by Hyundai Samho Heavy Industries TESTBED
Hyundai Samho boasts state-of-the-art facilities and high productivity thanks to welding automation and constant upgrades to the facilities and equipment.
Its last dock of the three was constructed in 2009, the latest among the docks in operation in the county.
“Our ship prices are about 20% higher than those of Chinese shipbuilders, but foreign ship owners are placing orders with us because we meet the delivery dates and quality expectations,” said Seo Chang-soo, Hyundai Samho’s administrative director.
GEOGRAPHIC ADVANTAGE
Geographic factors also contributed to its buoyant business. Its shipyard, 320 kilometers south of Seoul, is located on Korea's southwest coast, away from the normal route of typhoons.
It is also a 10-minute drive from the Daebul Industrial Complex in Mokpo, where its parts suppliers are based.
A Hyundai Samho shipyard dock As a sister company of HD Hyundai Heavy, it also benefits from the world’s largest shipbuilder’s reputation.
The parent company KSOE manages the order books of both HD Hyundai Heavy and Hyundai Samho so that they do not compete head-on, while pursuing orders in consideration of dock space occupancy.
Hyundai Samho serves as the testbed of the shipbuilding group’s latest high-value ships. It has received orders for 19 methanol-fueled ships, prices of which are on the rise with growing demand for low-emission vessels.
