While promoting its non-shipbuilding business, HHI was able to overcome the recent economic crisis to perform nicely in 2009
Since reaching the top of the world’s shipbuilding industry in 1983, Hyundai Heavy Industries (HHI) has remained second to none. Established in 1972, HHI has built and delivered approximately 1,500 ships. Every year, HHI has been responsible for 15% of the world’s new ships. However, the company has recently faced a crisis following a sharp decrease in new orders brought about by global financial crisis.
However, HHI promoted the sales of non-shipbuilding items, such as engines, plants (both land and ocean), construction equipment and electronics, enabling it to weather the storm. HHI was able to post its best-ever business performance thanks to brisk business in these non-shipbuilding sectors, in particular, plants and power generation equipment.
HHI’s 2009 sales rose approximately 6% to 21,142.2 trillion won up nearly 6% from 2008, while its operating profits increased about 1% to 2,222.6 trillion won. This means the company’s operating profits reached more than 2 trillion won for the second year in a run. While sales of its shipbuilding and non-shipbuilding divisions in 2007 were 50:50, last year the company’s shipbuilding division accounted for just 9 trillion won in sales, highlighting the non-shipbuilding division’s remarkable growth.
HHI is working hard in the ocean plant business as well. The heavy industry giant recently announced its successful tender to build the floating, production, storage and offloading unit (FPSO) of the Goliat Project. The tender for the Goliat FPSO was initially floated by Eni Norge AS (Eni) in June 2009. The contract is worth US$ 1.1 billion and came into effect on February 5, 2010. The floating unit will be delivered to Eni for installation in the Goliat Field, located 85km northwest of Hammerfest, Norway in the middle of 2013.
HHI, as an EPC contractor, will undertake all the project work covering engineering, procurement, construction, onshore commissioning and optional transportation. This cylindrical floater designed by Norway’s Sevan Marine will be able to produce more than 100,000 barrels of crude oil and 3.9 million standard cubic meters of gas per day. Able to store more than one million barrels of oil, it will measure 112 meters in diameter, 75 meters in height (incl. 44m of hull) and weigh approximately 52,000 tons.
In addition, HHI signed a contract worth US$1.4 billion for the SHWE Project in Myanmar with Daewoo International Corporation in February. The SHWE Project is for the development of Block A-1 and Block A-3 at Bengal Bay, located 70km west of Myanmar. It will install a gas production and processing platform to produce gas and transport it to Ramree Island through subsea pipelines before exporting the gas to China through an onshore gas terminal.
HHI has focused on the growth potential of the wind power generation business. The Ulsan Shipyard of HHI features a 1.65MW-class wind power generator measuring 70 meters in height, with the length of its wing a whopping 37 meters in length. This generator was installed at the breakwater of the second yard in 2009 and is designed for various tests for HHI’s wind power generation business. At present, the generator supplies power to facilities to produce ship blocks. This 1.65MW-class wind power generator will also be installed in the biggest wind power complex in the Sindh area of Pakistan. HHI signed a memorandum of understanding (MOU) with Yunus Brothers to build a 50MW-class wind power generation complex beginning in the middle of 2011.