No boom for Korean shipbuilding industry due to affiliated companies’

The shipbuilding industry was booming last year but did not enjoy any real profits because of affiliated companies' problems. According to related industry sources, the domestic shipbuilding industry showed record high orders, with half of those orders from all over the world.

Hyundai Heavy Industries Co., Ltd recorded $5.1 billion worth of orders and Samsung Heavy Industries Co., Ltd. received $4 billion worth of orders as of Nov. 2000, an increase of 82% over 1998. Daewoo Heavy Industries doubled its orders over 1998 to $3.7 billion, despite its work-out conditions.

Although these three shipbuilding companies showed marvelous numbers, net profits for the three did not reach 100 billion won due to losses sustained from supplying affiliated companies. Hyundai Heavy Industries gained 322.8 billion won in profitability in 1998, but didn't go far in attaining 100 billion won profitiability last year. As a holding company, it possessed a massive amount of stock in affiliated companies, and sold out Hyundai Aluminium and Daehan Aluminium shares to seperate Hyundi Motors at a loss of 200 billion won last year. Samsung Heavy Industries' chief shareholder suffered 100 billion in losses during the process of clearing out Samsung Motors, while Daewoo Heavy Industries increased its debt ratio to 400% in handling Daewoo Motors under court receivership.