Marine Engine Production
Hyundai Heavy Industries will build a plant in Saudi Arabia that will make engines used for ships and power generation. The company announced on July 5 that it has signed a memorandum of understanding (MOU) with Saudi Arabia’s state-run oil firm Aramco and industrial developer Dussur to set up a joint venture to produce engines for vessels and power plants.
Under the agreement, the joint venture will invest US$400 million (461.2 billion won) by 2019 to construct a factory capable of producing about 200 diesel engines per year at the King Salman Global Maritime Industries Complex in Ras Al Khair on Saudi Arabia's east coast.
Through the joint venture, Hyundai Heavy expects to earn additional profits from the joint venture, such as revenue from loyalty on its engine technology, construction parts and equipments, and technical services, as the company owns the original engine-producing technology.
In particular, Hyundai Heavy signing latest MOU is meaningful in that it is the company’s first license deal for its HiMSEN engine, proving its technical competence in the global market.
The HiMSEN engine, a medium-sized diesel engine that was independently developed by Hyundai Heavy in August 2000 for the first time in the domestic industry after 10 years of research and development, is generally used for ship propulsion and power generation. It has been sold to nearly 40 countries around the world, including Central and South America, Middle East and Asia, and commands the largest 22 percent share of the world’s medium-sized engine market.
In addition, Hyundai Heavy plans to aggressively develop the Middle Eastern engine and power plant market based on the joint venture. According to global market research firm TechSci Research, the Middle Eastern engine and power plant market is estimated to grow to 1.7 trillion won (US$1.48 billion) by 2026 on the back of surging electricity demand in Saudi Arabia and the United Arab Emirates.