Hyundai Completes Consolidation of Ulsan Shipbuilding Yards
South Korea’s Hyundai Heavy Industries reports it has completed the consolidation of its shipbuilding operations located in Ulsan, South Korea, as of December 1. The company previously operated Hyundai Heavy Industries as the largest builder in the group, with the smaller Hyundai Mipo as a mid-sized builder. The company also owns a third shipbuilder, Hyundai Samho, which remains independent.
The group announced the consolidation plan in August. They said the move will support the growth of the shipbuilding operations. The restructuring was also undertaken in response to the global trend of ship orders being consolidated around large shipbuilders. Management pointed to the moves in China, which reorganized China State Shipbuilding Corporation, and in Japan, where the large operations are also consolidating.
As China and Japan accelerated their restructuring of the shipbuilding sector, South Korea and Hyundai are also seeking to reinforce their shipbuilding competitiveness. Hyundai has expanded its operations into the Philippines and is seeking international shipbuilding capabilities. It has already launched partnerships in the United States with HII for naval shipping and with Edison Chouest Offshore for containerships.
Under the consolidation, HHI and the Mipo yard will share more resources and management. The company reports the strategy is to maximize synergies by unifying the design operations, research and development, and production capabilities. The focus will continue to be on developing new high-value ships and areas, including eco-friendly vessels and next-generation technologies.
The company highlighted that its goal is to grow shipbuilding sales to $25 billion annually. A key part of this strategy calls for a 10-fold increase in defense and warship sales. Hyundai Heavy Industries set a goal of achieving $6.8 billion in annual defense-related sales. The company won its first maintenance and repair contract from the United States this year for an auxiliary ship supporting the U.S. Navy.
Hyundai Heavy Industries expects the integrated operations will also play a key role in the Make American Shipbuilding Great Again (MASGA) promise by the South Korean government during trade negotiations with the United States. South Korea committed to investing $150 billion into the American shipbuilding industry. It was previously reported that Hyundai was exploring the possible acquisition of a U.S. shipbuilder to expand on its relationships with the industry.
The company also highlights the opportunities in emerging sectors. This, they said, includes icebreakers and ice-capable shipping. It points to South Korea’s initiatives to develop Arctic shipping and the overall growth in the area.