Daewoo Shipbuilding receives 6 container vessel orders

Daewoo Shipbuilding & Maritime Engineering (DSME) revealed November 8 that they succeeded in receiving 6 container vessel orders for 4,000 TEU vessels from Hamburg Sud, Germany at a price of $58 million for each vessel that the Ministry of Commerce, Industry and Energy (MOCIE) ordered to adjust.

DSME, however, objected to the government?s order and would take matters to court unless the government accepts their objection.

In a press meeting, DSME said that it signed with Hamburg Sud on a raised price, $58 million, up $3 million from their original price of $55 million per vessel. It said vessels would be delivered from the second half 2004 through 2005.

DSME said that it couldn?t understand the reason why the government worried about excessive competition and why the government settled the ship price at $58 million. They are seriously considering going to administrative litigation if the objections are not accepted, the company said.

DSME asserted that Hamburg Sud already made their position clear in an official letter revealing they didn?t choose DSME just for their low price. DSME reached 8.9% in trading profits ratio this year, which proved their vessels are competitively priced, the company proclaimed.

Mr. Nam, managing director of DSME said, ?It is inevitable for shipbuilding companies to compete over vessels. Regulation from government would hold down domestic shipbuilding markets, violating the free?market system.

In the meantime, MOCIE said November 8 that it is still valid for DSME to put order adjustments into practice because there are still procedures for the signing to be checked thoroughly.

An insider at MOCIE said, ?MOCIE would thoroughly inspect the enforcement of adjustments in case they receive any reports from DSME. Usually enforcement can be checked as to whether it follows the order or not, when reported by the manufacturer. DSME still hasn?t reported anything regarding the details of the contract.?

MOCIE ordered DSME to raise the vessel price to $58 million each under worries of hurting a fair vessel export environment.