Shipbuilders Start 2010 With New Orders

Source: The Korean Times
By Kim Hyun-cheol
Staff Reporter

Korean ship makers have had a positive start to the beginning of the year with a series of new orders, after suffering a huge slump in 2009.

STX Offshore & Shipbuilding said Monday it has won a $130 million order for four bulk ships from Turkish shipping firm Densa. The vessels will be constructed in its Jinhae dockyard for delivery in 2011.

``Discussions on orders have been steadily rising, which is a sign for a better sales performance this year,'' a spokesman of the company said. Last year, the maker had its first order in April amid growing worries over containership overcapacity prevailing in the global industry.

STX's 2010 sales target, which will be announced at today's board meeting, is expected to be higher than the $1.5 billion last year.

Korea's ship orders this year began last week, when Daewoo Shipbuilding & Marine Engineering (DSME) won deals totaling $750 million.

The second-largest maker will build two oil tankers and two bulk carriers for Angelicoussis Shipping Group of Greece by the second half of 2012, and also construct a $400 million offshore plant in Russia by 2013 for U.S. oil giant Exxon Mobil to use for oil and gas blocks development.

The contracts came after DSME clinched a 750 billion won late last month ($670.5 million) order to build 10 oil tankers for Almi Tankers, a Greek shipper, over the next three years.

Also last week, a mid-sized Sungdong Shipbuilding & Marine Engineering said it had signed a contract to build a bulk carrier for another Greek shipper and will ink another bulk ship deal with a German company, with the overall amount reaching over $100 million.

Contracts are on the rise with Greek firms, global leaders in the shipping industry. ``It might be premature to forecast, but a growing number of those major shippers could surely be translated to a pending turnover,'' a spokesman of a local shipbuilder said on condition of anonymity.

The year 2009 was nightmarish for most shipbuilders after enjoying five booming years of record highs. Overall orders turned downward steeply as the global economic crisis forced carriers to cancel or delay existing orders.

New orders at Hyundai Heavy Industries fell 61 percent to $10.6 billion last year.

Consequently, some makers are set to tighten their belts in spite of forecasts of a rebound. Hanjin Heavy, Korea's fifth-largest shipyard, plans to cut its workforce by more than 30 percent in an attempt to get over a management crisis caused by the recession in the industry.