Lee Choong-dong, right, the head of HHI’s green energy division, shakes hands with Magna E-Car Chief Financial Officer (CFO) John Simonetti at HHI’s headquarters in Seoul, Monday, after the two sides agreed to set up a joint venture to develop batteries for electric cars. / Courtesy of HHI

By Kim Yoo-chul

Hyundai Heavy Industries (HHI), the world’s biggest shipyard, is widening its portfolio as part of its diversification efforts.

Despite its failure in a solar cell venture, the firm is branching out into batteries.

It said Monday that it has set up a $200 million joint venture with Magna E-Car, a Canadian electric-car parts supplier, to develop batteries for electric vehicles. HHI’s investment portion is 40 percent.

The joint venture plans to build eight plants in the United States and Europe to produce 800,000 battery packs a year by 2020, according to the statement released by HHI.

The first plant will be constructed in Ontario, Canada and will start operations in 2014, said the statement.

``The venture is targeting a 30 percent market share in the electric car battery markets in the United States and Europe by 2020,’’ a company spokesman said.

Magna is one of the top five manufacturers of car components. HHI officials said the company is very keen to acquire patents in electricity storage-related technologies for synergy with wind power and solar cell businesses.

But the spokesman declined to reveal more about the deal.

To cut its previous heavy dependence on the cyclical and volatile shipbuilding business, HHI has been investing more in green projects in an attempt to guarantee its corporate future.

Last year, it created a new division that only handles green energy-related businesses. HHI is operating a solar cell plant in Eumseong, North Chungcheong Province, and runs a wind power plant in Gunsan, North Jeolla Provine, the biggest in South Korea.

The firm saw a decline in profit last year as its advance into solar cells failed to produce revenue.

``HHI should diversify its business portfolio amid troubles for its existing key businesses. More time will be needed for it to regain investor confidence. The recovery in profit will come from early next year, not this year,’’ said Yoo Jae-hoon, an analyst at Woori Investment.