Shipbuilding industry doing good job in gloomy economy

Amid the depressed steel, textiles and semi-conductors markets, the shipbuilding industry showed comparatively favorable results this year.

Though orders decreased slightly compared to last year's record highs, orders this year were of much better quality thanks to continuous order receiving and restructuring efforts.

The "big 3" shipbuilding companies, Hyundai Heavy Industries, Daewoo Shipbuilding & Marine Engineering (DSME), and Samsung Heavy Industries presented little difference in revenues this year compared to last year because they accepted high value-added vessels and on-shore plants, even though the number of vessel orders they received decreased.

Hyundai Heavy Industries has prepared to reshuffle its base financial structure from next year. DSME also gained credibility among the 12 Daewoo affiliates by graduating from its workout program. Samho Heavy Industries showed remarkable improvement this year since it was held in trust by Hyundai Heavy Industries since November 1999. It turned a net profit of 80 billion won up from a loss of 100 billion won last year, posting 1.05 trillion won in sales, more than double its sales last year, which were below 500 billion won.

According to this effort, the number of employees at the company is up to 5,800 from 3,200 when the Halla group went into bankruptcy at the end of 1997. It received orders for 20 vessels this year, leaving it with unfinished orders for 50 vessels.

Hyundai Mipo Dockyard reduced its repair capacities by about half this year, instead focusing on its new vessel business. Last year new vessels accounted for 70% of sales, but now account for about 85%. Total sales are expected to rise to 1.1 trillion won from last year's 756.3 billion won.

Hyundai's mid-sized special vessel orders totaled 36 as of the end of last month.

STX, formerly Ssangyong Heavy Industries, which took over Daedong Shipbuilding in October, showed total sales of 345 billion won up to the third quarter of this year, surpassing total sales of 325.8 billion won last year. It also posted orders for 11 vessels worth a total of 300 million dollars as of the end of November.