As Ko Jae-ho previously stated at the Korea Shipbuilding Association’s New Year gathering, global calls for the “greening” of ships are growing stronger, and international maritime organizations (IMO) are formulating and introducing regulations and standards on energy efficiency, emissions reduction, environmental protection, and navigational safety. These developments will drive a steady increase in market demand for environmentally friendly, high‑efficiency vessels. Green ships are becoming the darlings of both the shipbuilding and shipping industries. If shipbuilders proactively adapt to these shifts, such changes will present valuable opportunities to capture market share and become new pillars of competitive advantage. He added that Korean shipbuilders must preserve the industry’s longstanding strengths and shipbuilding expertise, while, going forward, building capabilities in offshore engineering, enhancing their design capacity, and raising the domestic content ratio of materials and equipment used in offshore systems—thereby further solidifying their foothold in this sector. To achieve this, shipbuilders should comprehensively strengthen collaboration with small and medium‑sized component suppliers.

Regarding the offshore engineering market, the Korean shipbuilding industry unanimously believes that the favorable momentum seen in 2012 will continue this year. Offshore engineering is a core strength of Korean shipbuilders, and they are poised to secure a substantial number of orders for offshore equipment. According to market intelligence from Korea, oil and gas fields across Asia, Europe, Africa, the Middle East, and Australia are all expected to increase their demand for offshore assets. Specifically, fields in Russia’s Sakhalin region, the North Sea, coastal areas of Asia, the northwest waters off Australia, the Middle East, and along Brazil’s coast may place orders for new offshore facilities this year. Moreover, many of the oil companies developing these fields are longstanding clients of Korean shipbuilders, significantly boosting the likelihood of securing contracts. The Korean shipbuilding sector forecasts that approximately 35 drilling vessels will be ordered this year, with Korean shipbuilders likely capturing around 30 of those contracts. In addition, the Korean shipbuilding industry is optimistic about the LNG carrier market and its related offshore equipment, citing growing LNG consumption and the United States’ plans to export LNG.
Response: Adjusting Business Strategies to Strengthen the Three Major Shipping Companies
The CEOs of Hyundai Heavy Industries, Samsung Heavy Industries, and Daewoo Shipbuilding & Marine Engineering all agree that the global economy remained in a crisis in 2013, and the downturn in the shipbuilding and shipping markets could become “protracted.” Accordingly, companies must implement measures to adapt and strive for the best possible results.
Hyundai Heavy Industries stated that it will establish a “flexible production system” capable of responding to crisis‑driven changes on an ongoing basis, strengthen its sales capabilities, and fundamentally improve its overall corporate health. The top priority for each business unit is to secure sufficient order volumes. To this end, the company will pursue proactive sales initiatives, accurately and promptly anticipate and track market trends and shifts, and formulate measures to minimize risks. In addition, it will refine design, manufacturing processes, and technologies, boost production efficiency, optimize its talent mix, comprehensively reduce production costs, and overhaul traditional operating practices—transforming departments with high costs and low efficiency into those characterized by lower expenses and higher productivity.
To this end, Lee Jae-sung, CEO of Hyundai Heavy Industries, has outlined this year’s business strategy: strengthen “substantive management” to address the deteriorating internal and external business environment; establish a long-term crisis‑response framework to cope with growing economic uncertainty and volatility; formulate and advance an industry‑wide strategy that differentiates the company from its competitors; bolster core competencies through selective focus and resource concentration; promote workplace safety; and continue efforts to foster harmonious labor‑management relations.
Ko Jae-ho, CEO of Daewoo Shipbuilding & Marine Engineering, stated that to address current crises and challenges, all employees must demonstrate greater enthusiasm, make thorough preparations, and steadfastly honor their commitments to customers regarding product quality and delivery schedules, thereby enhancing the company’s credibility in the market. As the global economy continues to navigate turbulent waters, Daewoo Shipbuilding’s competitive strengths lie in energy‑efficient, environmentally friendly vessels, land‑and‑sea engineering projects, and wind‑power generation equipment; the company will continue to invest in R&D and production facilities in these areas. 2013 marks the inaugural year of Daewoo Shipbuilding & Marine Engineering’s ambitious transformation into a world‑leading shipbuilding and marine EPCIC enterprise—providing end‑to‑end services from design and procurement through construction, installation, and commissioning. In line with this vision, Ko Jae-ho has outlined three key management principles: concentrating all resources on core business units, streamlining production processes, and fostering a corporate culture that prioritizes trust, passion, and workplace safety above all else.
In his New Year address, Park Dae-young, CEO of Samsung Heavy Industries, stated that the company’s order intake for shipbuilding and offshore engineering this year will reach US$13 billion, with offshore‑engineering orders accounting for more than US$10 billion. He added, “The shipbuilding market is expected to remain sluggish, so we will shift our strategic focus from ship construction to offshore‑engineering equipment. We will integrate our R&D and design centers for both shipbuilding and offshore‑engineering, establishing a combined production system that spans these two sectors. We will ensure an adequate workforce across all levels of development and design, while also promptly and accurately gathering information on key components and equipment for ships and offshore‑engineering assets. Onshore and offshore wind‑power generation systems, along with deep‑water offshore‑engineering equipment, constitute Samsung Heavy Industries’ two new business divisions; this year, these two units are set to deliver tangible results, and all relevant internal departments will provide them with robust support.”
Regarding the new-year business strategies of the three major shipbuilding companies, South Korean financial circles and industry insiders note that the conventional merchant‑ship market has been in a severe downturn in recent years, with only the land‑based equipment and offshore‑engineering sectors showing some vitality. In response to this market environment, Korean shipbuilders will continue to prioritize order intake in these segments this year; moreover, they plan to aggressively expand their foothold in the markets for energy‑efficient, environmentally friendly merchant vessels and onshore/offshore wind‑power generation equipment.
It is reported that Hyundai Heavy Industries, Samsung Heavy Industries, and Daewoo Shipbuilding & Marine Engineering have set this year’s order intake targets at US$29.7 billion (including Hyundai Samho Heavy Industries), US$14.2 billion, and US$13.0 billion, respectively.
(Source: Internet)