Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
HD Hyundai to merge 2 shipbuilding subsidiaries in Ulsan
This combined photo shows HD Hyundai Heavy Industries' shipyard in Ulsan and HD Hyundai Mipo's shipyard in the same city. Courtesy of HD Hyundai
By Park Jae-hyuk
HD Korea Shipbuilding & Offshore Engineering (HD KSOE), an intermediate holding company overseeing HD Hyundai’s shipbuilding business, announced plans Wednesday to merge HD Hyundai Heavy Industries (HHI) and HD Hyundai Mipo in a move to outpace competitors amid increasing shipbuilding cooperation with the United States.
Once the merger of the two Ulsan-based shipbuilding subsidiaries is complete, the integrated entity will operate as HD HHI.
Citing recent mergers of major shipbuilders in China and Japan, HD KSOE said the integration will especially bolster the company’s competitiveness in the naval vessel market.
Unlike HD HHI, which has a proven record in building and exporting warships, HD Hyundai Mipo does not have a license to construct naval vessels, though it possesses docks and facilities suited for warship construction.
According to the U.K. defense industry magazine Janes, new contracts for naval ships worldwide are expected to total 2,100 over the next 10 years, collectively worth $360 billion.
HD KSOE said the integrated HD HHI aims to generate 10 trillion won ($7.1 billion) in annual revenue from the defense sector by 2035. The new entity also seeks to expand its share in the market for special-purpose vessels, including icebreakers, given the increasing demand for Arctic shipping routes.
"With the merger, we will increase our market share and secure advanced technologies," an HD KSOE official said.
In addition to the merger plan, HD KSOE announced plans to establish an investment firm responsible for overseeing HD Hyundai’s overseas operations, including those in Vietnam and the Philippines.
This new company will be established in Singapore in December to address challenges from Chinese competitors in the bulk ship and tanker markets and to streamline the decision-making process for overseas business.