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S. Korean Shipbuilders Struggling to Meet Annual Order Targets
An Uphill Battle Ahead
S. Korean Shipbuilders Struggling to Meet Annual Order Targets
  • By Michael Herh
  • June 26, 2018, 12:23
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Korea's three major shipbuilders are facing an uphill battle to attain their new order targets for this year. 

The three major Korean shipbuilders are struggling to attain their new order receipt targets for this year.

Hyundai Heavy Industries (HHI) has received US$5.6 billion worth of new orders so far this year, about 38 percent of its target for 2018, which is set at US$14.8 billion. The figure includes the orders received by HHI’s two sister companies, Hyundai Mipo Dockyard and Hyundai Samho Heavy Industries.

Daewoo Shipbuilding & Marine Engineering (DSME) posted US$3.2 billion in new order receipts as of June 26, attaining 44% of its annual target of US$7.3 billion.

Samsung Heavy Industries (SHI) has won new orders totaling US$2.3 billion thus far, which amounted to 28 percent of its annual order target.

HHI has booked orders for 33 oil tankers, 19 container ships, 15 gas tankers and two others so far. The company has not won any order for a liquefied natural gas (LNG) carrier, which is the most expensive type of vessel.

SHI has received orders for five LNG tankers, eight containerships and 11 oil tankers. DSME has landed orders for 26 ships, ten of which are LNG tankers. In terms of order quality, DSME stands out among the three.

DSME also leads its two rivals in terms of the ratio of the orders received to the annual goal. The gaps between DSME and the remaining two companies will widen further when Hyundai Merchant Marine (HMM) sign contracts with the three for vessels ordered earlier this month. HMM has agreed to place an order for seven 23,000-TEU vessels with DSME and five 23,000-TEU vessels with Samsung Heavy Industries. HHI will be awarded an order for eight 14,000-TEU vessels.

The three Korean shipbuilders are keen to win offshore plant orders in the second half of this year. Currently, they are competing to land an order for the Chevron Rose Bank, which is expected to be placed this year. The project was once won by HHI and was later canceled. It was resumed this year. The three Korean shipbuilders and a Singapore company are in competition. The bidding process has been completed and bidding companies are waiting for the client’s decision.