Gunsan Shipyard to Restart Shipbuilding After Nine Years
Plans to fully relaunch the long-dormant Gunsan Shipyard in South Korea got a boost as the company signed a letter of intent to build its first ships in nine years. The contract was announced concurrently with the closing of the acquisition of the yard by an investment group from HD Hyundai.
The yard had fallen victim to a downturn in the shipbuilding industry nearly a decade ago and never achieved its full potential as an expansion for Hyundai’s shipbuilding operations. The company opened the yard in 2010 to increase capacity and used the yard until 2017, when it suspended the operation, citing the lack of orders. Partial work was resumed at the yard after five years, but it was only being used to build blocks for the main HD Hyundai shipyards.
As part of the reorganization of Hyundai’s shipbuilding operations that also saw it combine its Ulsan and Mipo yards, the company also reported in March that it had agreed to sell the Gunsan yard. The closing of the sale came on June 26 with the launch of a new company, J Ocean Heavy Industries. The company’s largest investor is Echo Prime Marine Pacific, which in turn is part of Dongbu Engineering & Construction. The companies are also investors in HJ Heavy Industries, which is also a partial owner of the new company.
The letter of intent calls for the construction of four 114,000-ton crude oil and petroleum product tankers. They identify the shipowner only as a company in Oceania.
The plan is to operate J Ocean alongside HJ Shipbuilding to provide a large increase in total capacity. HJ is a mid-sized yard that also undertakes repair work but is constrained on the size of vessels. The Gunsan yard has an approximately 700-meter (approximately 2,300-foot) dock and was designed to build 10 to 12 ships a year, including ultra-large vessels.
Under the terms with HD Hyundai, it will continue to build blocks for the company for up to three years. Hyundai is also providing technical support to the yard.
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The new owners admit the yard comes with no backlog, which they are presenting as an opportunity for shipowners. While most yards have long waits for building slots, Gunsan has immediate capacity, providing quicker turnaround for orders.
Echo Parime Marine Pacific reports it has already had multiple inquiries for shipbuilders looking for fast delivery. It also comes as the United States continues to expand operations with South Korea. HJ is one of the yards certified to bid for US Navy auxiliary repair and maintenance contracts. It is currently conducting work on the USNS Amelia Earhart, a U.S. Military Sealift Command dry cargo and ammunition ship, and reports that it expects additional contracts to be put up for tender in the coming months.