Survival of the Fittest in Shipbuilding Business - Autumn 2013
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Autumn 2013 A Publication of Hyundai Heavy Industries www.hyundaiheavy.com COVER STORY Survival of the Fittest in Shipbuilding Business
CONTENTS Autumn 2013
04
CEO MESSAGE
18 31
VIEW POINT
GLOBAL HHI
Aiming Higher with US Shale Gas to Drive More
Eyes on Customer Satisfaction Singapore, LNG Carrier Orders
the Lion City
32
06 FINANCIAL NEWS
COVER STORY The Light at the End
of the Tunnel
Survival of
the Fittest in 34
Shipbuilding TECHNOLOGY
Low-Noise Design of
Business Offshore Facilities
22
FEATURE
HHI’s New Drillship – 35
ANALYST REPORT
HD 12000
Slow and Steady Improvement
26
PEOPLE 36
KOREAN PANORAMA
Yoon Finds Life
in Hyundai Heavy From Missionaries to Gymnasts
KOREAN CRAFT and Gorillas: Baseball in Korea
PEOPLE
Creating a New Future –
The Glen Lyon FPSO
What Looks Good Tastes Good 11
HHI ROUNDUP
30
NEW PRODUCTS
Hyundai Heavy Develops All New ForkLift,
There is a saying in Korea – what looks good tastes good. It reflects the noble culture for food of old Koreans who
Hi-Res Marine Digital Radar 10/13/15 BTR-9
wholeheartedly made even the smallest thing. The ddeoksal, a rice cake pattern maker which makes nice shapes with
several patterns, would be the best symbolic icon for this wisdom. The ddeoksal is mostly made of wood or ceramic, with
these stamps regarded as a fine work of art themselves. Cutting the rice cake into the right size and pressing the ddeoksal
on it gently, the bold pattern stands out. Koreans used to wish for good fortune and longevity by engraving the yin-yang
New Horizons is published by Hyundai Heavy Industries Co., Ltd. and is distributed free of charge. For a complimentary subscription, contact the Overseas Public Rela-
symbol, plaid, chrysanthemum, and fish. To celebrate, cheer up, or send a present on a special day, people express their tions Department at hhiopr@hhi.co.kr, tel +82 52 202 2287. New Horizons is now available to download in pdf format at http://english.hhi.co.kr/others/magazine The
feelings with rice cake of various patterns. Source – Master Kim Kui-suk (Moksan Craft Museum) opinions expressed by the authors are not necessarily those of Hyundai Heavy Industries Co., Ltd.
CEO MESSAGE
Aiming Higher with Eyes on
Customer Satisfaction
W ell past the half way mark of the year, the world econo-
my has yet to show signs of recovery and neither does
the global shipping industry. Amid growing concerns that the
to build five 18,400 TEU container carriers, so far the larg-
est of their kind. It has also received an order to build one
semi-submersible drilling rig from Diamond Offshore. The
The Electro Electric Systems Division is facing tough com-
petition from both the industry’s leading companies and
late starters. Nevertheless, it is gaining competitiveness
prolonged, tepid growth could be a new norm, HHI is push- Offshore & Engineering Division has achieved 90.2% of its through continued development of production technologies
ing ahead with our efforts to surmount the present challenges order target for this year, winning orders worth USD 5.4 and streamlined project management.
by optimizing the management of resources and maximizing billion of the goal of USD 6 billion. The Construction Equipment Division’s efforts to carve
synergy across the business divisions. Despite increasingly tough competition in the global in- out overseas markets are paying dividends. Although the
In particular, we are placing renewed focus on honing dustrial plant construction market, the Industrial Plant & En- markets have shrunk to 2008 levels due to the world eco-
our competitive edge by keeping ourselves at the forefront gineering Division won the Shuqaiq Steam Power Plant (SSPP) nomic slowdown, the division’s sales have been on a steady
of innovation and technology development attuned to ever Project in Saudi Arabia on August 4. The division is also just rise. Furthermore, with a view to further expanding its busi-
changing market demands. While continuing to strengthen a few steps away from winning the contract to build a power ness, it has entered into a strategic alliance with Atlas Wey-
our core competencies, we are aiming higher with our sights and desalination plant in Kuwait worth USD 1 billion. hausen, making continued efforts to create fresh demand.
firmly set on providing greater value for our clients. Given the heightened global interest in fuel efficiency, The world economic outlook is murky at best, dominat-
We are pleased to report that we are on track to achieve the Engine & Machinery Division, which started develop- ed by persisting uncertainties. Undaunted, Hyundai Heavy
Lee Jai-seong, President & CEO our sales and order targets for this year without much diffi- ment of environment-friendly and fuel efficient marine and Industries is sailing forward steady and firm, guided by
culty. The Shipbuilding Division has already achieved 64.1% stationary engines early on, currently finds itself in an ad- its passion for excellence and confidence to meet and pre-
of its order target, winning orders amounting to USD 3.1 bil- vantageous position. Moreover, it plans to further increase vail over any challenges. Whatever the future may have in
lion within the first half of this year. The division recently its revenues by expanding the application of its HiMSEN store for us, our focus will always remain the same: bring-
won an order from CSCL (China Shipping Container Lines) engines to offshore facilities. ing greater value and satisfaction to our clients.
04 05
New Horizons Autumn 2013 New Horizons Autumn 2013
COVER STORY
Survival
of the Fittest
“We are certainly in better shape than last year,
but it is premature to say the shipbuilding
market has recovered. Fundamentals have yet
in Shipbuilding to be improved,” said Kim Oi-hyun, HHI’s
president and COO of shipbuilding division.
Business
By Alex Lee
A protracted maritime recession
has driven the world’s shipbuild-
ers to fight for survival in increasingly
worth of contracts, nearly 60% of the
2013 target.
By the end of this year, Hyun-
choppy conditions. No one knows for dai Heavy’s shipbuilding backlog is
sure when the industry will bounce expected to rise to 20 months from
back and many shipyards, big and around 18 months. The yard’s once
small, are in grave peril. 30-month backlog has declined over
After failing to meet its target the past years because of dwindling
la st yea r, Hy u nda i Heav y I ndus- orders for new ships.
tries (HHI) is mounting an aggres- “We are certainly in better shape
sive campaign to win more orders for than last year, but it is premature to
its value-added vessels and boost sag- say the shipbuilding market has re-
ging profits. It seems the world’s big- covered. Fundamentals have yet to
gest shipyard’s shipbuilding division improve,” said Kim Oi-hyun, HHI’s
and its affiliated company, Hyundai president and COO of the Shipbuild-
Samho Heavy, are well on their way ing Division.
to achieving their 2013 order target of Mr. Kim, 59, a 38-year veteran
USD 12.5 billion for this year. who has witnessed the ups and downs
In the f irst six months of this of the world’s shipbuilding industry,
year, Hyundai Heavy and its Hyun- sees an only modest recovery of the
dai Samho unit won USD 6.8 billion global shipbuilding business in the
07
New Horizons Autumn 2013
COVER STORY
coming years, though new ship prices ity support from its creditors to survive.
might have already hit the bottom.
“The market is expected to get better, Chinese Yards
but the pace of growth will not be as Mr. Kim sees uncertainties in global
fast as before,” said Mr. Kim. economic outlook spelling more trou-
“We are now seeing a light at the ble for China, which has aggressive-
end of the tunnel,” said Kim. ly pushed to modernize its drydocks
“Looking back at our past, there and close the technological gap with
were many times when our docks South Korean competitors in recent
were empty,” said Kim. “When we years. The huge expansion in China
overcome the current diff iculties, helped create a glut of low-tech ves-
there will be much better opportuni- sels that has kept freight rates low and
ties for us.” prolonged the agony for shipowners
Hyundai Heavy, having diversi- across the globe.
fied its vessel portfolio by building Debt-laden shipyards in China
more sophisticated and fuel-efficient that otherwise should have gone bust
vessels, is relatively well positioned to were allowed to stay af loat thanks
weather the prolonged shipbuilding to increased policy loans by Chinse
slump because of the shipping indus- lenders under government control.
try’s move away from dry bulk carri- But Beijing will not be able to keep
ers and tankers to higher value vessels. providing a lifeline to what has now
Four years into one of the worst become an unprof it able business.
downturns to afflict the global ship- Chinese shipyards are offering deep
ping industry, hundreds of small to discounts for new vessels to protect
mid-sized shipyards are teetering on market share from rivals in South Ko-
the brink of extinction as orders dwin- rea and Japan.
dle and lenders slash credit lines. Chinese industry executives say
As one of the most striking remind- as many as half of China’s 1,600 ship-
ers of the current global shipbuilding building companies are expected to
gloom, China Rongsheng Heavy indus- go bankrupt or be acquired by larger
tries, China’s largest private shipbuild- rivals in the next two or three years.
er and a major supplier of bulk carriers, In contrast to Chinese shipbuilders’
said in July it was seeking emergency gloom, South Korea’s long established
funding from the Chinese government shipbuilders may benefit from the wave
and its largest shareholder. of consolidation in the shipbuilding sec-
STX Offshore and Shipbuilding, tor and further strengthen their position
one of South Korea’s leading shipbuild- as a major force after the recovery.
ers, is also relying on emergency liquid- South Korea surpassed China last
08
New Horizons Autumn 2013
COVER STORY
“We need to further distinguish ourselves in
technology, quality and services and make rapid
progress. That’s the key to open a new era.”
year as the industry’s most sought af- in line with ship speed and sea condi- over China, such as mega container-
ter shipbuilding nation, as shipowners tions. It plans to hand over the vessels ships, large LNG/LPG carriers, and
become more interested in advanced starting in the second half of next year. offshore vessels.
and fuel-efficient vessels to help off- China Shipping’s purchase of the “Technology is our key weapon,”
set rising maintenance and fuel costs. five vessels comes as new and big- Mr. Kim added.
In 2012, South Koreans won contracts ger vessels delivered from Asian ship- Mr. Kim said Hyundai Heavy has
worth nearly USD 30 billion, while builders are expected to enter the mar- no plan to expand yards, but added
Chinese yards received USD 18.2 bil- ket in the months to come, adding to a the company will go ahead with R&D
lion worth of orders, according to market already fighting overcapacity. investment to develop new models of
World Shipyard Monitor published by Hyundai Heavy is expecting to high-tech vessels and eco-friendly en-
Clarkson Research Services. win more orders for such big contain- gines.
In the first half of this year, Chi- erships this year. “We will go ahead with invest-
nese shipyards received USD 10.5 bil- Mr. Kim said Hyundai Heavy’s ment in R&D because right now is the
lion in orders, while South Korean booming offshore engineering unit, best time for investment,” said Kim.
builders received USD 18.5 billion, which builds FPSO and other offshore He said the company is current-
according to Clarkson. drilling and production facilities, is ly marketing its own new models of
In an efficiency drive, the con- well on track to surpass the 2013 or- drillships and LNG carriers after de-
tainer shipping industry has seen a der target of USD 6 billion. In the first veloping them in accordance with
trend towards building ever bigger half, the unit received about USD 5.4 customer needs. Hyundai Heavy has
vessels, which will also benefit Hyun- billion worth of contracts. also developed a ship tank for LNG
dai Heavy, a dominant supplier of ul- China wants its yards to move up carriers, saving the company on roy-
tra large box ships. the value chain by building higher- alty payments.
In January this year, Hyundai quality vessels and to become a player In July, Hyundai Heavy said its
Heavy won a USD 600 million order in the offshore engineering business, consortium had succeeded in develop-
from Seaspan for five 14,000 TEU con- a lucrative sector in the generally de- ing “vessel digital radar” which can de-
tainerships. The contract included an pressed shipbuilding market. tect objects as small as 70 centimetres
option exercisable by the owner to or- Mr. Kim said it will take time for in diameter from 10 km away. Its core
der five additional container ships of China to catch up to South Korea in part, the solid-state power amplifier,
the same class to be built by Hyundai production technologies of high-end has a lifespan of 50,000 hours, more
Heavy. Delivery is scheduled from 2015. vessels, “but we need to further distin- than 16 times that of its predecessor.
In May, Hyundai Heavy signed a guish ourselves in technology, quality, The radar can be delivered for
contract to deliver five of the world’s and services and make rapid progress. use in ships as early as next year.
largest containership to China Ship- That’s the key to opening a new era.” In line with information technolo-
ping Containers Lines for USD 700 gy development, HHI is embarking on
million. Each ship can carry 18,400 Technology a new project, Smart Ship 2.0, which
20-foot boxes. The new fuel-efficient Mr. Kim said Hyundai Heavy’s busi- will fortify its marine solutions.
ships will use a main engine that can ness focus will be in the area where
automatically control fuel consumption the company has a technological edge The writer is a journalist based in Seoul
10
New Horizons Autumn 2013
HHI ROUNDUP
recognized as MVP by recording the
Companywide highest score (98.94) in the competition. Shipbuilding
HHI has produced 88 prize win-
Hyundai Heavy Develops ners including 46 gold medal winners Hyundai Heavy Wins Order to Build World’s
and 14 silver medal winners since it
Hi-Res Marine Digital Radar first participated in the World Skills Largest Containerships
Competition in 1978.
Shipbuilding
HHI Launches Navy’s Second Frigate
HHI unveiled the South Korean Navy’s
second 2,300-tonne frigate on July 18.
The launching ceremony took
place at Hyundai Heavy’s shipyard
HHI announced on July 2 that it de- functionality of the marine radar can in Ulsan, attended by the Chairman
veloped a next-generation high-res- be used for military purposes as well of the Joint Chiefs of Staff, the Navy
olution marine digital radar that can as on offshore facilities and airplanes. chief, and other senior officials.
detect objects as small as 70 cm from Hyundai Heavy plans to com- The frigate is capable of carrying
10 km away. mercialize the new digital radar by maritime operations helicopters, and
The new radar for ships is the 2015 after approval from internation- is equipped with advanced radar sys- HHI won a USD 700 million or- main engine will maximize fuel effi- The containerships, measuring 400
fruit of a joint development project al classification societies in the sec- tems, a 127-mm main gun, sonar sys- der for five 18,400 TEU container- ciency, and reduce noise, vibrations, mm in length, 58.6 m in width and 30.5
between HHI and nine organizations ond half of 2014. tem as well as anti-aircraft and anti- ships from China Shipping Contain- and carbon emissions by automatical- m in depth, are scheduled to be hand-
including state-run research institutes “Starting with the development ship missiles. It has a maximum speed er Lines (Hong Kong) on May 6. ly controlling fuel consumption to suit ed over from the second half of 2014.
since July 2010. of this new marine digital radar, we of 30 knots and accommodates up to The world’s largest containerships sailing speed and sea conditions. The With this order, HHI has won or-
The solid-state power amplifi- aim to set up new technological stan- 120 personnel. will feature an electronically-con- EcoBallast system can treat 3,000 m3 ders for 10 ultra-large containerships
er of the new radar has a lifespan of dards in the global shipbuilding in- The Incheon-class frigate was trolled main engine and HHI’s Eco- of seawater per hour by filtering, and this year including five 14,000 TEU
50,000 hours, which is about 16 times dustry,” said Mr. Hwang See-young, named ROKS Gyeonggi, after the prov- Ballast seawater treatment system. sterilizing bacteria and plankton big- containerships from Seaspan Corp.
longer than that of predecessor. The CIO of Hyundai Heavy. ince that surrounds the capital Seoul The electronica lly-controlled ger than 50 µm with ultraviolet rays. in January.
and the western port city of Incheon.
tion, and Mr. Hong Jin-mu won a sil- The first frigate, ROKS Incheon, was launched in January. HHI announced on May 30 that it be delivered
Companywide
ver medal in the sheet metal section. ROKS Gyeonggi will be delivered won a USD 750 million order to build by November 2015.
Four Win Prizes in World Mr. Eun Sung-hyun, and Mr. Jang Jun- to the Navy next year and deployed a semisubmersible drilling rig for Dia-
Skills Competition hee won bronze medals in distributive for operation in 2015. mond Offshore.
Four of HHI’s employees won prizes technique of communications network The drilling rig, measuring 123 m
at the 42nd World Skills Competition and plumbing sectors, respectively. The in length and 96 m in width, can op-
Shipbuilding
in Germany on July 7. winners are all from HHI’s Technical erate in waters 3,000 m deep with a
Mr. Won Hyun-woo won a gold Education Institute. The competition’s HHI Wins USD 750 Million drilling range of 12,200 m from the
medal in the steel-frame structure sec- gold medal winner, Mr. Won, was also Semisub Rig Order sea’s surface. The rig is scheduled to
12 13
New Horizons Autumn 2013 New Horizons Autumn 2013
HHI ROUNDUP
Industrial Plant & Engineering Engine & Machinery
Hyundai Heavy Wins USD 3.3 Billion Power Ballast Water Treatment System Accepted
Plant Order in Saudi Arabia by US Coast Guard
135 km north of Jazan, by 2017.
Hyundai Heavy also adopts the
supercritical generator technology
that the Company used in the USD 3.2
billion Jeddah South Thermal Power
Plant ( JSTPP) project it was awarded
from SEC in October 2012. The su-
percritical generator is used to gener-
ate electric power by operating at such
a high pressure that it uses less fuel
and produces less greenhouse gases
than other types of steam generators.
Upon completion, the steam power
plant will be able to produce enough
electricity for about 2 million people.
The signing ceremony was at-
tended by Dr. Al-Awaji, the Chairman
of Board of Saudi Electricity Compa- HHI announced on July 25 that its According to the Standards for as AMS will play a positive role for the
ny; and Mr. Lee Jai-seong, president electrolysis-based ballast water treat- Living Organisms in Ships’ Ballast Wa- company to win more HiBallast or-
HHI won a USD 3.3 billion order from power project on a turnkey basis in- and CEO of Hyundai Heavy Indus- ment system, HiBallast, was accepted ter Discharged in U.S. Waters, Final ders for ships operating on US routes.
Saudi Electricity Company (SEC) to cluding engineering, procurement, tries, in Riyadh, Saudi Arabia. as Alternative Management System Rule, it is mandatory for all new ships HHI is also aiming to win the
build the Shuqaiq Steam Power Plant construction, commissioning, and test- In the Middle East , Hy undai (AMS) by the United States Coast built from December 2013 coming into US Coast Guard’s approval for an-
(SSPP) in Saudi Arabia on August 4. ing. The Ulsan, South Korea-based Heavy has successfully completed Guard. This comes after the compa- and going out of US ports to install ap- other ballast water treatment system,
Hyundai Heavy, as the sole EPC EPC contractor will complete the proj- and is currently executing more than ny won type approval from the In- proved ballast water treatment sys- EcoBallast, by the first half of 2014.
contractor, will carry out the construc- ect on the Red Sea coast, approximate- 12,000 MW power and desalination ternational Maritime Organization tems. Hyundai Heavy believes the US This system sterilizes seawater by us-
tion of the 2,640 MW oil-fired steam ly 580 km to the south of Jeddah and plants worth USD 12.7 billion. (IMO) in 2011. Coast Guard’s acceptance of HiBallast ing ultraviolet rays.
modules and sail out for the Gorgon Mobil (25 percent) and Royal Dutch by 15 cm when its welding arm is re- With the installation of software assembly robots, 10 models of LCD
Offshore & Engineering
P roje c t on Ju ne 8 . T he mo du le s Shell (25 percent). First gas is planned tracted, can operate in confined areas for steel cutting, blasting, and paint- handling robots, and is in the process
Two Gorgon Modules Sail Out weigh 4,237 tonnes and 1,827 tonnes, for 2014. inaccessible to human welders. The ing, the robot can also perform these of developing various types of surgi-
respectively. They are the eighth and robot’s six joints enable the machine other shipbuilding roles. HHI plans cal robots in association with Asan
ninth of 51 modules for the project. to carry out almost all types of weld- to improve the robots to be usable for Medical Center.
Engine & Machinery
The Gorgon Project’s scope in- ing work at a similar speed usually building onshore/offshore facilities
cludes a three-train, 15 million-met- HHI Develops Mini Welding Robot done by a welder. and construction equipment. The mo-
ric-tonne-per-annum liquefied natu- for Shipbuilding Moreover, a magnet on its body bile welding robots are scheduled to
ral gas (LNG) facility and a domestic HHI announced on May 7 that it means the machine can be attached to be used in building ships in HHI from
gas plant. The project is operated by developed mini welding robots for steel walls or ceilings. Weighing just the second half of this year.
the Australian subsidiary of Chevron building ships. 15 kg, an operator can control three Hyundai Heavy, South Korea’s
(50 percent) in a joint venture with The compact design of the welding machines at the same time, increasing largest industrial robot manufacturer,
HHI completed the production of two Australian subsidiaries of Exxon- machine, measuring 50 cm by 50 cm productivity threefold. also manufactures 20 models of car
14 15
New Horizons Autumn 2013 New Horizons Autumn 2013
HHI ROUNDUP
(Electronic & Electrical Industries
Construction Equipment Green Energy Corporation) in Ulsan on July 2.
With this agreement, EEIC will
Hyundai Heavy Launches Hyundai Heavy & KAIST import the switchgears made by HHI
as semi-finished product and assem-
New Construction Equipment in Russia Open Research Center ble them locally before delivery.
Construction Equipment
HHI Sends 80-tonne Long Reach Ex-
cavators to Jeddah Plant Site in Sau-
HHI signed a memorandum of un- ceremony at KAIST’s campus. di Arabia
derstanding with KAIST (Korea Ad- HHI will support R&D and op- HHI sent two 80-tonne long reach ex-
vanced Institute of Science and Tech- eration costs for the HK Research cavators to Jeddah South Thermal
nology) to establish the HK Research Center for the next 5 years to jointly Power Plant construction site in Saudi
Center in the field of energy, water, develop original technology in this Arabia on June 13.
environment, and sustainability on field, and to establish business foun- The excavators w ill carr y out
June 21, 2013. dation for the future. work on the site’s 5.5-km-long seawall
HHI launched its brand new con- Both units were well received by tion equipment , was attended by Mr. Kang Sung-mo, president of “We are expecting to secure a in August. The long reach excavators
struction equipment including am- visitors, with even the display being 1,038 exhibitors from 30 countries all KAIST; Mr. Lee Jai-seong, president high level of technology for the future have a boom length of 10.80 m and
phibious excavators and road build- sold at the exhibition. over the world. & CEO of Hyundai Heavy; as well as business based on our research result arm length of 7.15 m.
ing equipment in CTT2013, held in The CTT2013, one of the world’s more than 20 researchers from the joint while KAIST strives for study,” said HHI is building the 2,640 MW
Moscow from June 4 to June 8. largest annual exhibitions of construc- research center attended the agreement Mr. Hwang See-young, CIO of HHI. oil-fired thermal power project on a
turnkey basis including engineering,
pressor Corporation with a technical to increase the pressure of the gas, The press line, a cutting-edge procurement, construction, commis-
Engine & Machinery Engine & Machinery
license partnership since 2011. The making it easier to transport through cover panel production facility with sioning, testing, and transferring in
Hyundai Heavy Manufactures First Japanese company supplies the impel- pipelines. Hyundai Heavy’s gas com- HHI Wins a Press Line Order automatic equipment system and four Jeddah, Saudi Arabia.
Centrifugal Gas Compressor ler and rotor while HHI is responsible pressor is capable of delivering 1,100 from Nissan large presses including a 2,400-tonne
HHI completed the shop performance for manufacturing, testing, and com- tonnes of natural gas per hour by press, will be delivered to Nissan’s
test of it s f irst cent r if uga l ga s missioning of the compressor, and pressur izing it from 4,500 k Pa to Russian plant in the first half of 2015.
compressor on June 1. supplying other parts. 6,900 kPa.
The centrifugal type compres- The new gas compressor was de-
Electro Electric Systems
sor, more compact and less noisy than livered to KOGAS Masan Compres-
other types of compressors, is used sion Station in June, and will come on HHI & EEIC Sign Switchgear
in onshore and offshore gas plants to stream from December this year with echnical License Agreement
transport high volumes of high pres- a 22 MW class gas turbine driver. HHI held a ceremony for a techni-
sure natural gas. A centrifugal compressor is high HHI won an order to build a press line cal license agreement for semi-knock-
HHI has been cooperating with performance turbo machinery that on a turnkey basis for the first time from dow n sw itchgear w ith Saudi A ra-
Mitsubishi Heavy Industries Com- uses a high-speed rotating impeller Nissan Motor Company on June 11. bia-based switchgear maker EEIC
16 17
New Horizons Autumn 2013 New Horizons Autumn 2013
Global HHI
Founded in 1819 by Sir
Thomas Stamford Raffles
as a British trading post,
modern Singapore has grown
from a settlement of 1,000
people to one of the most
advanced cities in the world.
Singapore,
the Lion City S ingapore is located off the south-
er n t ip of t he Ma lay Pen insu-
la separated from Malaysia by the
Straits of Johor. Only 140 km north
of the equator, Singapore is highly ur-
banized although over half the coun-
are Malay, 9% are Indian, and the rest
are Eurasian or from other groups.
The fertility rate is the third lowest
in the world and well below the lev-
els required to replace the population.
Consequently, about 40% of the pop-
Woodlands
try is covered by greenery and lush ulation is made up of permanent res-
vegetation. Sixty-three islands make idents or foreign workers/students as
Choa Chu Kang
up Singapore and the process of land the government has been encouraging
Changi reclamation is creating more land for immigration to the country for years.
development. Hyundai Heavy Industries’s Singa-
Tuas Toa Payoh Singapore has a diverse demo- pore Branch was established in 1996
Jurong Bedok
Singapore graphic mix. With a population of 5.3 with four business divisions.
Queenstown million, about 20% are foreign work-
ers or students. Of the 3.2 million that Shipbuilding Division
are citizens, 75% are Chinese, 14% Among many other business activ-
19
New Horizons Autumn 2013Global HHI
Marina Bay Sands,
a Miracle of 21st Century
Architecture.
ities, Singapore Branch Office con- ous marketing endeavors in Singapore, of project mobilization. Their mission ucts such as rotating machinery, switch- Though a small country (only 710 km2), Singapore punches well above its weight on the world
stage. And Marina Bay Sands is the engineering and construction marvel symbolic of this coun-
ducts marketing for shipbuilding busi- 15 ships, roughly USD 2.1 billion in is to help the vessels to complete each gears, transformers, GIS, and LV &
try. The three buildings, each 200 m high, are inclined toward each other making the shape of
ness in Southeast Asia. value, are under construction as of July project within the planned schedule MV circuit breakers is also provided.
the Chinese character ‘ ’, meaning ‘to enter’. The gradient between the 22nd and 23rd floors is
With various shipping segments this year in Korea. in a safe way. 52 degrees, 10 times steeper than the Tower of Pisa in Italy. It could be said that the architec-
in active operation, the marketing fo- Engine & Machinery Division ture symbolizes Singapore itself as home to people of Chinese, Malaysian, Indian, Eurasian, Ar-
cuses on various ship types such as Offshore & Engineering Division Electro Electric Systems Division The Engine & Machinery Division is menian, Arabian, and Jewish descent.
tankers, bulkers, container ships and The Offshore & Engineering Divi- Singapore branch has staff dispatched the world’s largest marine diesel en- The Sky Park, connecting the three buildings, gives Marina Bay Sands the shape of a ship.
The Sky Park is 12,400 m2, three times the size of a football stadium. It is used as a giant botan-
LNG/LPG carriers. sion conducts business marketing and from headquarters in Ulsan to pro- gine builder with approximately 36%
ic garden with 250 trees and 650 kinds of plants. It also houses the world’s longest swimming
As the global economy’s centre of offshore installation support. Many vide onboard service for the ACO- global market share. Singapore Branch pool, at 150 m long.
gravity shifts more to Asia, Singapore major oil & gas companies are locat- NIS™ alarm monitoring & control sys- Office supports customers by provid- The enormous urban entertainment center was designed by Moshe Safdie. The architect
is in a unique position to attract ship- ed in the Asia Pacific region. Obey- tem, high & low voltage switchboard, ing total service such as onboard ser- says he was inspired by card decks. Ssangyong Engineering and Construction carried out the
owners and other related businesses, ing orders from the head office in Ko- HIMAP™, ACONIS2000 PMS™ pow- vice, technical advice, troubleshooting construction work on this complex entertainment building. The interior of Marina Bay Sands is
as gorgeous as its exterior. In the hotel lobby, there are many works of art, including those of
like shipbrokers and ship financiers rea, the offshore team in Singapore er management systems, bridge navi- regarding 2-stroke engines, 4-stroke
American artist Antony Gormley and Rising Forest, 832.9m-tall ceramic pots, made by Zheng
(Singapore is the 4th largest financial office mobilizes crews as per required gation watch monitoring system (Hi- engines, propellers, cargo oil pumps, Chong-bin, a famous potter in China. The complex cultural space functions as a business, en-
hub, after London, New York, and job classification and supplies equip- WMS™), and voyage data recording side thrusters, and turbines for box- tertainment, shopping center and hotel and it has become a national lead attraction because
Hong Kong). ment as well as materials to derricks system (HiVDR™). Sales support ser- ships, tankers, bulk carriers, car carri- more than one million people visit this place each year and a lot of jobs have been created. In
As a result of persistent and vigor- and pipe-lay vessels within the period vice for all HHI electro electric prod- ers, and drillships. this respect, it has been considered as the world-class model for effective growth.
20 21
New Horizons Autumn 2013 New Horizons Autumn 2013FEATURE
HHI’s New Drillship
HD 12000
Amid persistently high oil prices and solid
balance sheets, large oil companies have
been expanding their investments, not only
in geographical terms but also in larger,
more efficient vessels.
L eading the way in offshore oil &
gas discoveries is the drillship.
Equipped with a drilling derrick and
nies have been expanding their invest-
ments, not only in geographical terms
but also in larger, more efficient vessels.
moon pool, drillships have extensive Dema nd for d r i l lsh ips ha s i n-
mooring or positioning equipment, as creased over the last few years in light
well as a helipad to receive supplies of deepsea development and growing
and transport staff. production. Hyundai Heavy has been
Drillships work in water depths in the spotlight for drillships with its
ranging from 2,000 feet to more than compact design philosophy and will-
10,000 feet (610 m to 3,048 m). Drill- ingness to work with owners and op-
ing equipment is passed through the erators from the design stage to de-
vessel’s moon pool and connected to liver custom-made drillships. Since its
the well equipment below via riser first drillship in 2010, Hyundai Heavy
pipe, a somewhat f lexible pipe that has won orders for 16 ships and al-
extends from the top of the subsea ready delivered 3 units to date.
well to the bottom of the drillship.
Despite the downturn in the glob- JDP Between HHI & Lloyd’s Register
al shipping and shipbuilding indus- Since Lloyd’s Register has wide ex-
tries in 2011, most global oil majors are perience in building drilling rigs in-
expecting the current period of E&P cluding jack-up and semi-submersible
expansion to last at least until 2017. rigs for the UK offshore area, HHI
Amid persistently high oil prices and decided to establish a joint develop-
solid balance sheets, large oil compa- ment project ( JDP) with LR. HHI and
22 23
New Horizons Autumn 2013 New Horizons Autumn 2013FEATURE
LR have strong advantages in their position even in emergency situations
own specialized fields. It is there- and a patented thruster canister de-
fore desirable to share experiences sign which allows onboard inspection
and improve productivity and safe- and maintenance of the thruster with-
ty. The JDP put the wide beam drill- out having to be docked, leading to de-
ship design through rigorous design, creased drilling downtime.
ship motion, fatigue, and FE analy- Innovative hull form design based
ses. HHI’s lead engineers and Lloyd’s on HHI’s innovative technology and
Register’s experts worked on design long experience enables a high transit
development on everything from hull speed (reduced form resistance with
structures, marine, mechanical, elec- integrated thruster pod to hull) with
trical, and drilling systems. 40% less fuel consumption, enhanced
sea-keeping performance (roll angle
New Aspects on HD12000 Drillship reduced by 20%), reduced interaction
HD12000 drillship measures 223.0 m & thruster efficiency improvement and
in length, 40.0 m in breadth and 18.5 enhanced dynamic positioning capa-
m in depth with transit speed of 11.5 bility (20% less fuel consumption).
knots (using aft three thrusters) and Moreover, the forward deck shield
operating draught of 11.5 m. reduces w ind resist a nce, protect s
Increased beam of 40 m allows the forward mooring deck area from The Table as Follows Shows the Unique Features of HHI HD12000 Drillship.
larger variable load capacity (up to green water and adds additional safe-
24,000 tonnes) and reserved buoyan- ty to the muster area. Main Particulars Capability of HD12000
cy for heavy duty work. Furthermore, From HHI’s experience with com-
Setback Capacity mt 1,587 - 2,200
HD12000 design can accommodate pact drillships (HHI-Gusto P10000
Hook Load st Main : 1,250 - 1,600 Aux. : 750 - 1,000
Cylinder Rig concept which can be design), compartment arrangement
an alternative for bigger derrick load has been improved and simplified for Riser Tensioner kips 3,500 - 4,500
requirement. easy access and maintenance. In ac- Riser Storage Capacity 12,000 ft - 14,850 ft
The arrangement of mud pumps & cordance with application of the in- BOP 1 & BOP 2 15K or 20K psi 7 - 8 ram
pits, P-tanks and riser hold on the in- line arrangement of eng ine room,
Crane 85 - 100 mt × 4 sets (Option : 165 mt AHC)
side of the hull provides a very large pump room, and HV switchboard
Bulk in Sacks sack 6,000 - 10,000
free deck area that is permanently room, the structural design and rout-
available for tubular storage and third ing of the dynamic positioning system HP Mud Pump set 4-6
party equipment. was simplified and improved. Also, Thruster 5,000 - 5,500 kW (Hull mounting or Canister type)
HD12000 drillship has fully dynam- moving the mud pump room and pit Heave Compensators on Main & Aux. Well Active Heave Compensated draw-works or CMC
ic positioning (IMO DP Class 3) com- to the double bottom enhances stabil-
Cylinder Derrick Yes
pliant station keeping capabilities, with ity and simplifies system/piping ar-
FWD Deck Shield & Complement Yes & 210 P or More
sufficient power to allow it to maintain rangement.
24 25
New Horizons Autumn 2013 New Horizons Autumn 2013PEOPLE
Yoon Finds Life in Hyundai Heavy “Hyundai Heavy means life to me. I felt as if I was presented
with my family and house like year-end bonuses at some point
By Grace Choi of my lifetime career.”
K orean executives f ind it hard
to balance between work and
family due to heavy responsibilities.
what’s happening in the company
with his wife and two children, which
he believes helps him come close to
feel pride in my supervising role,” said
Mr. Yoon who is called “microman-
ager” among his staff.
Interestingly, it set a record of deliver-
ing a bulk carrier one month before the
yard was completed in March 2010.
Tough competition often forces them his wife and children. Hands-on management does not However, a major challenge re-
to spend more time with their compa- In addition, as they lived in the always result in positive results but his mains to be tackled in Gunsan: lack
ny colleagues than with beloved ones. same apartment complexes near the micromanaging style often worked in of skilled workforce.
Mr. Yoon Moon-kyoon, a senior shipyards in Ulsan, families of Hyun- decades past. For example, 15 years “As our major workforce in Gunsan
executive vice president of Hyundai dai Heavy workers formed a com- ago when he was in charge of an as- is in their 30s, they are energetic and
Heavy Industries, represents compa- munity and shared similar interests. sembly line in Ulsan, Mr. Yoon and at the same time are less experienced
ny-focused workaholics even if he says Some of them moved to Gunsan and his team were having a difficult time in their jobs,” Mr. Yoon said. “So we
his devotion is not against his will. they continue to make outings togeth- due to a demanding client. brought some engineers from Ulsan
“Hyundai Heavy means life to er for dinner or mountain climbing “I part icipated in most of the to train them in fields such as weld-
me. I felt as if I was presented with over weekends. meetings, encouraged yard workers ing, cutting, and painting.”
my family and house like year-end As rains force half the yard work- to meet the client’s demands, used Why did Hyundai Heavy select
bonuses at some point of my lifetime ers to lay down their tools, the rainy to come back from dinner with the Gunsan as the site for a new shipyard
career,” Mr. Yoon said. “One day, I season in July is a major concern for workers to hold an umbrella over their when its smaller rivals went abroad?
came back home from work to find Hyundai Heavy families. On July heads one night,” he said. “I was very Samsung Heavy Industries, Daewoo
my children grown up a lot.” 4, when this writer stepped into Mr. happy when the ship was delivered af- Shipbuilding & Marine Engineering
His remarks show how focused Yoon’s office in Gunsan for an inter- ter a one month delay.” and STX Offshore & Shipbuilding built
Mr. Yoon has been in his job for the view, it was raining heavily. He was Mr. Yoon is expected to continue shipyards in China. Hanjin Heavy In-
last 33 years at the world’s biggest looking out the window. his micromanagement in the Gunsan dustries went to the Philippines.
shipbuilder. “As some of the shipbuilding pro- plant to make a bigger contribution to “We decided to build a new plant
Moreover, M r. Yoon t raveled cess takes place outdoors, it is heavily the company’s bottom line. Hyundai in Gunsan to avoid any leakage of
only once with his wife for their hon- exposed to climate challenges such as Heavy plans to deliver 13 ships this technologies and to create jobs in the
eymoon to Jeju Island, not newlywed rain, snow, and wind,” said Mr. Yoon year – largely high-end ships such as city,” said Mr. Yoon. “I believe that
favorites such as Hawaii or Guam. who was named head of the Gunsan container carriers and drilling rigs – Gunsan will be a stepping stone for
Work kept him from taking time to shipyard in January. from its Gunsan yard. It built a total HHI to fortify high tech and value
attend any of the entrance and grad- His duty also includes leading the 30 ships in 2012 there. added fields.” added Mr. Yoon.
uation ceremonies for his son and Gunsan shipyard through climate dif- As the sea-level change of Ulsan is
daughter during the whole of their ficulties and training yard workers who 0.5 meters during the ebb and flow but The writer is a journalist based in Seoul.
school years. They are now adults. are younger and less experienced than is 7 meters in Gunsan, Hyundai Heavy
This summer, he is planning to those in the main Ulsan shipyard. had to build the pier at Gunsan 6 me-
take a family trip for the first time to He is not a master in such engi- ters deeper than that in Ulsan. As a re-
Jeju Island. Looking back on his career, neering fields but he is in production sult, the company invested a total of 1.3
Mr. Yoon says he spent only 10% of his management. trillion won (USD 1.2 billion).
time on family things but put the same “If a manager is good at control- He sa id t he compa ny ha s re -
value both on work and private life. ling the production site, it will help trieved most of its investment in Gun-
He tries to share nearly most of drive up productivity. That’s why I san due to new orders.
26 27
New Horizons Autumn 2013 New Horizons Autumn 2013PEOPLE
Creating a New Future – The Glen Lyon FPSO 25 year design life, it has recovered its
originally planned oil in 12 years but
ity. Mr. McCarron explains:
“We have class requirements to meet
flecting BP’s intent to establish deeper
long term relationships with selected
because of the extreme operating con- because we have a vessel until it is suppliers. In line with this intent, BP
ditions we are seeing its operating ef- moored in field. Then it becomes a and HHI are also completing the top-
By George Deftereos
ficiency decline. We believe there are fixed production facility. In line with sides modules for the BP Clair Ridge
significantly more oil reserves in this UKCS safety requirements we need Project. Recognizing HHI’s capability
The Glen Lyon FPSO is the first project to be built under a new Global field so now we need a new vessel that to have a formal safety case approved to deliver to milestones and unmatched
can operate safely and efficiently for that addresses our hazards and risks fabrication abilities, BP’s Glen Lyon
Agreement between BP and HHI reflecting BP’s intent another 25 years,” says Mr. McCarron. and how we mitigate them.” FPSO and Clair Ridge projects will lay
to establish deeper long term relationships with selected suppliers. The vessel is what BP describes The design of the new FPSO is a the foundation for future collaboration
as a ‘harsh environment FPSO’ be- collaborative effort with companies between the two companies.
cause the operating environment west from around the world coming togeth- Why HHI? Along with fabrica-
of Shetland is one of the most extreme er to build a state-of-the-art facility. tion ability, Mr. McCarron says the
S chiehallion is one of Scotland’s
most prominent mountains, and
like the mountain, Schiehallion oil
in which to produce oil and gas. A fa-
cility operating in this area needs to
withstand the severe environmental
Engineering, procurement, construc-
tion, hull design, and hull commis-
sioning will be carried out by Hyundai
work ethic, the level of profession-
alism, and the people are what put
Hyundai Heavy ahead of the pack.
field is a major asset for BP and its conditions that exist on the Atlantic Heavy. KBR in Singapore has been “HHI capability is widely recog-
partners. The field, located in the margin. Lessons learnt from the origi- responsible for the design of the top- nized. How HHI does business, work
UK’s continental shelf 290 km west nal facility are reflected in the design side’s facilities, under HHI’s manage- ethic, and professionalism, is very
of Shetland, has been home to BP’s of the Glen Lyon FPSO. The aim is ment. The turret is being designed by high. Hyundai people are commit-
Schiehallion FPSO since 1997. Having to safely deliver oil and gas over the SBM Offshore in Monaco and will be ted to making both HHI and the cli-
reached its original production goals next 25 years, for the vessel to have a fabricated by Dyna-mac in Singapore. ent successful. The teams work very
and in light of the discovery of signifi- high uptime and reliability and to be Because the biggest factor in startup closely together, and the people are
cant additional reserves, the company efficiently operated and maintained. (ie, how quickly can the facility be pro- very close. We have many challeng-
has decided that a new vessel is need- This will maximize the return on in- ducing oil/gas) is the completion level es ahead of us, but we have a very
ed to maximize recovery from these vestment for BP and its partners. BP when the facility leaves the shipyard, close relationship with HHI, focusing
material assets over the next 25 years. has a 33.35% stake in this venture and HHI will put all the pieces together in on safety, completing the work, and
That’s where Glen Lyon FPSO and will operate the FPSO on behalf of its Ulsan, ensuring the FPSO is ready to maintaining the relationship.”
Mr. Gerry McCarron come in. other partners, Shell with the major- operate when it arrives at the field. Perks of working in Ulsan are the
Mr. McCarron has 27 years of ity stake holding of 54.5% and Statoil When it arrives at the Schiehal- many festivals and its proximity to
experience working in the oil & gas and OMV both with 5.88%. lion field, the facility will be con- Busan for the baseball and Gyeongju
industry and has worked previous- Glen Lyon FPSO is being built to nected to one of the largest subsea for the historical sites. In Ulsan with
ly with HHI teams for BP projects in the requirements needed to operate developments in the world. It will be his wife Margaret, Mr. McCarron says
Azerbaijan, Singapore, and Vietnam. in the UK Continental Shelf. Almost anchored from the base of the turret she enjoys oil painting classes and
He was also the startup and com- parallel to NORSOK standards, these to the seabed with 20 anchors, but it walks in the bamboo forest near their
missioning manager on the original requirements include ATEX, relat- will rotate around the turret to make apartment. One of his favourite pas-
Schiehallion FPSO and is excited to ed to the safety of electrical systems; sure the facility is always pointed into times is going to Lotte Giants base-
play a part in creating a new future for the European Commission’s Pressure the prevailing weather. Mr. McCar- ball games, though because of a hectic
Schiehallion. Now, he is the delivery Equipment Directive, and all other ron says it can be quite disorientating work schedule his trips to see friends
manager for BP’s newest vessel. Mea- governing European directives; as if you’re standing on the turret when he made while in Geoje have not been
suring 270 m by 52 m, the Glen Lyon well as the many other regulatory and the FPSO weathervanes, as one mo- as frequent as he’d like. Obviously, the
FPSO will have a production capac- statutory compliance measures for the ment you can be looking at the bridge rules are the same, but the atmosphere
ity of 130,000 barrels of oil a day and existing Quad 204 area. and the next all you see is the vast ex- at Busan’s Sajik Stadium is electric. It’s
storage of1 million barrels. The FPSO Unlike a boxship or oil tanker, panse of the North Sea. yet another aspect of Korea that one
will also be able to produce 220 mil- Glen Lyon FPSO needs to meet both The Glen Lyon FPSO is the first has to experience for themselves.
lion cubic feet of natural gas a day. the requirements for a seagoing vessel project to be built under a new Global
“While the original vessel had a as well as those for a production facil- Agreement between BP and HHI re- The writer is a copy editor of New Horizons.
28 29
New Horizons Autumn 2013 New Horizons Autumn 2013NEW PRODUCTS VIEW POINT
All New ForkLift, US Shale Gas to Drive More
10/13/15 BTR-9 LNG Carrier Orders
By Crystal Chan
Travel Speed (MAX)
Model Km / h
S hipbuilders can expect to w in
more LNG carrier orders as more
US LNG export projects are approved.
export a total of 4.4 million tonnes of
LNG to Japan’s Osaka Gas and Chu-
bu Electric from 2017 and another 4.4
of LNG a year from the Sabine Pass
project. KOGAS sold 36.55 million
tonnes of LNG in 2012, up 8.9% from
10BTR-9 13
In what will become an increas- million tonnes to BP from 2018. 33.57 million tonnes in 2011. It plans
13BTR-9 13
ingly rare event, March passed with Osaka Gas and Chubu Electric to sell 37.86 million tonnes of LNG
15BTR-9 13 no new orders and only one delivery. will reportedly tender for up to nine this year, up 3.6% from 2012 figures.
There were concerns in April when LNG carriers to haul LNG from Free- China too, is increasing LNG im-
Flex LNG cancelled an order for four port LNG. Both parties are negotiat- ports to meet growing energy demands
Gradeability (MAX) floating LNG (FLNG) vessels that was ing with Korean shipbuilders and in- and national research estimates that it
Model % placed at Samsung Heavy Industries in ternational shipowners. will need up to 100 LNG carriers by
10BTR-9 18
2008. The lack of financial support and Freepor t w ill supply 14.7 million 2020, from just six units today. In 2012,
the right project had delayed the com- tonnes to Japan, which would require China imported 14.68 million tonnes of
13BTR-9 15
mencement of vessel construction. 27 LNG carriers. LNG. That is set to double in the next
15BTR-9 13 However, that was just a blip and Given Japan’s annual shipbuild- five years and by 2020, China’s imports
since then, shipbuilders in South Ko- ing capacity, analysts think 19 ves- could reach 60-100 million tonnes.
rea, Japan, and China have been re- sels will be placed with Japanese ship- Expect more LNG carrier orders
HHI’s Construction Equipment Divi- ceiving new LNG carrier orders. builders, while eight vessels will go to as even Canadian LNG export proj-
sion introduced its line of 9-series bat- Year-to-date, 23 ships have been Korean shipbuilders. ects are pending approval. BG is seek-
tery forklift trucks, the 10/13/15 BTR- ordered, bringing the global outstand- LNG demand is also expected to ing approval for its project in Prince
9 in April. The newly designed three- ing orderbook to 107 ships of over grow steadily with increasing demand Rupert, British Columbia. The first
wheel counterba la nce t r ucks w ill 16.3 million cbm. South Korean ship- for clean energy. phase of the proposed Prince Rupert
provide operators comfortable driv- builders remain the leaders in this While the Tohoku Earthquake LNG project is expected to produce 7
ing, increased productivity, and easy segment, accounting for 77 of these and Japan’s subsequent nuclear cri- million tonnes a year after beginning
maintenance. outstanding orders. sis in March 2011 precipitated a rush operations in 2021, while market con-
HHI developed this new line of April was an active month, with of speculative orders of LNG carriers, ditions will determine if the second
forklift in light of European market Nigeria LNG ordering six ships at year-to-date orders have been found- phase will come onstream.
demand for a smaller forklift which Hyundai Heavy Industries and Sam- ed on long-term supply contracts with
has a competitive price and better sung Heavy Industries. Australian and US projects like Ich- The writer is a markets reporter
with IHS Fairplay magazine
working efficiency in narrow spaces. More LNG carriers will be con- thys and Sabine Pass.
The newly designed trucks feature a tracted as new projects emerge in Korea Gas Corporation, South 50
45
rear-wheel driving system to reduce Australia and the US. Korea’s sole LNG seller, has declared 40
32
costs as it uses only one motor while The review and approval of proj- that it would diversify its LNG supply
30
the previous line of forklift with front- ects to export US LNG to nations sources to North America, in response 23
20
wheel driving system uses two motors. with which the US does not have free to shale gas development, having pri-
10
The new model also adapts fixed- trade agreements is underway, with marily relied on the Middle East and 10
5
2
wheel base type to improve safety and another project, Freeport LNG, being Southeast Asia for LNG supplies. 0
reduce friction between the ground approved on May 17. For 20 years from 2017, KOGAS 2008 2009 2010 2011 2012 2013
and tires. The Freeport LNG project expects to intends to import 3.5 million tonnes LNG Carrier Orders Total
30 31
New Horizons Autumn 2013 New Horizons Autumn 2013FINANCIAL NEWS
The Light at the End of the Tunnel
New Orders & Backlog Stock Metrics
(unit: USD million ,as of the end of Jun)
2013 2013 2012 Achievement YoY Backlog Aug 19,
Divisions
Plan Jun. (YTD) Jun. (YTD) (%) (%) (Delivery basis) 2009 2010 2011 2012 2013
Shipbuilding 7,750 4,970 3,131 64.1 58.7 21,487 High for the Year (Closing, KRW) 250,000 456,500 554,000 345,000 248,500
Offshore & Engineering 6,000 5,411 739 90.2 632.2 19,933
Low for the Year (Closing, KRW) 148,500 171,000 235,500 195,500 176,000
Industrial Plant & Engineering 6,000 158 514 2.6 -69.3 6,026
Closing, KRW 173,500 443,000 257,000 242,000 221,000
Engine & Machinery 3,100 1,432 1,197 46.2 19.6 3,807
Market Cap. (Closing, KRW billion) 13,186 33,668 19,532 18,392 167,960
Electro Electric Systems 3,160 1,032 1,340 32.7 -23.0 2,532
Construction Equipment 3,272 1,500 1,602 45.8 -6.4 - Foreign Ownership (%) 17.38 20.20 16.91 18.89 17.12
Green Energy 394 133 131 33.8 1.5 128 PER (H/L) 7.0/4.2 9.8/3.7 17.2/7.5 19.1/10.8 N/A
Total 29,676 14,636 8,654 49.3 69.1 53,913 EPS (KRW) 35,705 46,594 31,751 18,031 N/A
USD Exchange Rate Stock Performance
Source: KEB — HHI (Left, Won) — KOSPI (Right, Point)
KRW 550,000 3,000
1,140 2,600
450,000
1,120
2,200
1,100
350,000
1,080 1,800
1,060
250,000
1,400
1,040
Date Sep.03 Nov.01 Jan.02 Mar.04 May.02 jul.01 Aug.01 150,000 Jan. 2009 Aug. 2009 Mar. 2010 Oct. 2010 May. 2011 Dec. 2011 Jul. 2012 Aug. 2013 1,000
Sales in Second Quarter of 2013 New Orders 454,000/day. Therefore, from the sec- dur North project in Middle East. USD 133 million from USD 131 mil- Light and Shadow
The largest business division, the However, HHI showed a prodigious ond half of 2013, drillship orders which In line with the gloomy outlook lion. The division has new 5.5 MW tur- Hyundai Heavy Industries continuous-
Shipbuilding Division’s sales were i mprovement i n new orders. T he have been held up are expected to be of the shipbuilding market, orders for bine models for offshore use in the final ly invests in R&D to overcome the pre-
KRW 4.47 trillion, at a similar level Shipbuilding Division won orders released. This trend might see more or- marine engines have decreased. The stages of testing and expects to bring carious market.
to the same period last year. The worth USD 4.97 billion, achieving ders being placed at Shipbuilding and Engine & Machinery Division has tak- them to market in 2014. HHI has received orders for sev-
Offshore & Eng ineer ing Div ision 64.1% of the annual goal of USD 7.75 Offshore & Engineering divisions go- en USD 1.43 billion in new orders, ac- eral special purpose vessels such as
i ncrea sed it s sa les by 9. 5% t o billion in the first half. Offshore & ing forward. counting for 46.2% of its annual goal. Second Half Outlook OSV(Offshore Support Vessel) and ac-
K RW 1. 2 4 t r i l l io n . T he E n g i ne Engineering Division received USD The Industrial Plant & Engineer- To diversify its earnings, the division is The shipbuilding market, especially commodation vessel. As offshore en-
& Machiner y Div ision a nd t he 5.41 billion in orders, accounting for ing Division won USD 158 million expanding its independent four-stroke commodity types, will remain prosaic ergy development is growing, the de-
Construction Equipment Division’s 90.2% of its annual order target. These in orders in the first half due to some engine, HiMSEN, to offshore purposes. until the first half of next year. In the mand for special ship will continue to
sa les were K W R 422 bi l l ion a nd two divisions’ performances cast away planned major projects being post- The Electro Electric Systems Di- meantime, the demand for eco-friend- increase. With a large and experienced
KRW 1.03 trillion, respectively, up the worries of gloomy outlook. poned to the second half. However, the vision posted new orders worth USD ly and fuel efficient ships will drive workforce, HHI has a strong foothold
0.3% from the same period last year. High energy prices have led oil division won a USD 3.3 billion order to 1.03 billion, making 32.7% of its an- the market. in this business.
Other divisions’ sales fell from majors and deep sea explorers to invest build the Shuqaiq Steam Power Plant nual new orders goal. This result can A short-term solution to enhanc-
the same period last year due to the in drillships and other offshore oil & (SSPP) in Saudi Arabia on August 4. be attributed to fierce competition in ing shipping and shipbuilding market
unfavorable ma rket sit uat ion and gas production facilities. As evidence, The division is now well on track to global markets. is not visible, and mixed signals from
uncertainty. drillship chartering contracts are be- achieve its new order target as it also The Green Energy Division’s new the US economy continue to make its
ing made at considerable prices at USD bidding for other projects such as Al orders slightly gained from last year, recovery uncertain.
32 33
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