HANJIN HEAVY INDUSTRIES

- HANJIN Heavy Industries and Construction (HHIC)’s Subic Shipyard signs a LOI to build eight 5,400TEU container ships with European client
- Agreed to cooperate with each other in offshore plant with Singaporean shipyard… synergy effects are expected


On March 8, HHIC’s Subic Shipyard signed a LOI to build eight 5,400TEU container ships with a European client. In fact, its recent success in
bidding continues.

According to the Korean shipbuilder, the newly contracted ships are highly fuel-efficient. In terms of capacity, they are same with the ones the Subic Shipyard contracted last year with 5,400TEU. Therefore, it is expected that productivity and profit would increase.

Early this year, HHIC’s Subic Shipyard already won USD 600 million (options included) bid to build 12 vessels in total including 6,800TEU
container ships and 38,000cbm LPG carriers. Because it still has four ships to build from the option on the last year’s contract, it is very likely that the
company would book enough advance orders for three years of production.

In addition, the Subic dockyard signed an MOU for mutual cooperation in offshore plant with Singapore shipyard, the world’s leader in the
manufacture of offshore plant to secure long-term revenue source. Since then, it has been very aggressive to create synergy effects through
business diversification by participating in various joint projects and penetrating into steel structure business.

Despite current unfavorable market conditions in shipbuilding industry, HHIC has concentrated on winning orders and improving revenue
structure through business diversification with a goal of maximizing synergy effects among shipyards in Korea and abroad.

Thanks its strenuous efforts to enhance cost competitiveness through cost innovation and win bids using the sales networks around the world, it has been able to achieve current successes such as Yeongdo Shipyard’s signing of LOI to build Offshore Support Vessel (OSV) and
Subic Shipyard’s recent success.

If the ongoing deal is successfully concluded, HHIC’s Subic Shipyard’s achievement would increase up to 20 vessels in total this year only, which would in turn make a big contribution to the company’s business performance.