Hyundai Heavy targets $90 billion in revenue
By Kim Yoo-chul
Hyundai Heavy Industries (HHI), the world’s biggest shipbuilding company, plans to achieve 100 trillion won or some $90 billion revenue in 2015 by diversifying its business portfolio.
The ambitious management target comes as HHI celebrates its 40th anniversary this year, starting in the shipbuilding business in 1972.
``HHI is aiming to reap 100 trillion won in revenue by 2015, an increase of 50 percent from last year’s 66 trillion won,’’ the company said in a statement.
It has grown into a world-class firm for heavy industries with key business divisions spanning from shipping, plants and shipbuilding to engine equipment and green energy.
The firm said it will invest more in an attempt to further strengthen its ongoing initiatives for shipbuilding businesses as it believes the global demand for shipbuilding to steadily rise over the next few years.
HHI has cumulatively built over 100 million tons of ships over the shipyard’s 40-year history. No other shipbuilding company in the world has ever built more.
It has delivered a total of 1,805 diverse types of ships, ranging from drilling vessels, liquefied natural gas or liquefied petroleum gas carriers and container ships to submarines and naval ships, to more than 280 owners in 49 different countries.
They include 510 container ships, 351 oil tankers, 343 bulk carriers and 124 product carriers.
``HHI’s annual order and sales targets for this year are up 19.6 percent and 9.5 percent respectively from our results in 2011, when we had had $25.54 billion in orders and 25.2 trillion won in sales,’’ said a company spokesman.
In a congratulatory message to employees, HHI CEO Lee Jae-sung said the shipbuilding titan regards this year as ``another starting point’’ for the next 40 years and asked employees to come up with more ideas for sustainable corporate growth.
But it is being challenged to effectively overcome uncertain macro-economic moves because the profitability of key businesses is highly-dependent upon economic situations.
Asian shipyards are bracing for challenging times ahead, as current oil prices increase operating costs, a glut of containerships and tankers are putting heavy downward pressure on freight rates, and new-build ship financing is becoming increasingly more complex.
Lee also confirmed an earlier Korea Times report that the shipbuilder is lowering its investment for solar-related business, which is one of HHI’s next growth engines.
He said the company won’t make ``any investment’’ in the solar business this year, hit by debt a crisis in Europe and the massive advance by Chinese companies for the market.
According to the revised business roadmap for solar business, the company’s investment plan for a factory in Eumseong, south of Seoul, is being delayed.
``We think HHI’s efforts to diversify its cash-generating portfolios make sense and the 100 trillion won revenue goal by 2015 looks achievable. But the solar business is currently seen as a double-edged sword and that means HHI needs to implement more fine-tuned strategies to prevent it from falling further,’’ said a fund manager from an U.S.-based investment bank in Seoul, asking not to be identified.