By Kim Yoo-chul
Hyundai Heavy Industries (HHI), the world's biggest shipyard, plans to invest $30 million in China to build its first research facility in the biggest emerging market.
"A maximum $30 million will be invested to our research and development (R&D) center in Shanghai," said a company spokesman, Monday.
Further investment will be used to hire research personnel, while Hyundai has been set to spend to acquire the land and for administrative costs, the company official added.
Hyundai said it is keen eyes to establish the center, the first among other top-tier Korean shipbuilders, as part of its China initiative to develop its strategic products.
The overseas R&D center will be Hyundai's sixth after four in Korea and one in Hungary.
In a statement it said the investment decision came amid Beijing's "favorable gestures" for foreign companies to acquire cutting-edge shipbuilding-related technology.
``China is giving more tax incentives and other benefits to foreign companies that operate R&D centers there. HHI is expected to boost its strategic partnerships with existing global companies including Microsoft and General Motors (GM), which run R&D centers in Shanghai,’’ Hyundai said.
Hyundai's facility in China will initially be tasked to develop next-generation shipping technology ranging from smart-grid, wind-power facilities to robot systems in addition to construction equipment and engines.
Hyundai said it will initially hire 30 qualified personnel from North America, Europe and Asia. The spokesman said it will expand the number of up to 200 over the next two years.
HHI is keen on renewable energy in an effort to find its next earnings drivers amid the flattening growth in shipbuilding markets.
HHI is targeting the creation of 10 percent in sales from renewable energy out of its total revenue by 2013, plans to go on-line with its wind-power facility in Weihai, China, from late May. The facility could produce 300 turbines with each one running at the 2-megawatt level annually.
A Switzerland-based brokerage of UBS raised its target for HHI to 530,000 won, citing diversifying business portfolios to cushion market downturns.