As Koh Jae-ho previously stated at the Korean Shipbuilders' Association New Year's gathering, the global call for "greener" ships is growing increasingly louder. The International Maritime Organization (IMO) is formulating and introducing regulations and standards for ship energy efficiency, environmental protection, and navigation safety, which will drive increasing market demand for eco-friendly, high-energy-efficiency vessels. Green ships are becoming the "darling" of the shipbuilding and maritime markets. If shipbuilders can proactively and positively respond to this change in the shipbuilding market, these changes will present excellent opportunities for shipbuilders to capture market share and become new elements of their competitiveness. He stated that Korean shipbuilders must maintain the strength and technological capabilities in shipbuilding accumulated over many years. On this foundation, "they must acquire offshore plant technology, improve offshore design capabilities, increase the localization rate of materials and equipment for offshore plants, further solidify the offshore plant foundation, and to this end, shipbuilders must comprehensively strengthen collaboration with small and medium-sized partner companies."
Regarding the offshore market, the Korean shipbuilding industry generally agrees that the strong momentum of the international offshore market in 2012 will continue this year. Offshore is precisely the strength of Korean shipbuilders, and they are expected to secure a considerable number of offshore equipment orders. Market information available to Korea indicates that offshore oil and gas fields in Asia, Europe, Africa, the Middle East, and Australia will have demand for additional offshore equipment this year. For example, oil and gas fields in Russia's Sakhalin, the North Sea of Europe, coastal Asia, the Northwest Shelf of Australia, the Middle East, and offshore Brazil may place orders for a batch of offshore equipment this year. Moreover, the oil companies developing the above-mentioned oil and gas fields are mostly long-time customers of Korean shipbuilders, making it very likely that Korean shipbuilders will receive orders. The Korean shipbuilding industry predicts approximately 35 drillship orders this year, with Korean shipbuilders expected to secure about 30 of them. Additionally, the Korean shipbuilding industry is optimistic about the LNG carrier and derived offshore equipment markets, based on the expansion of LNG consumption demand and the expected export of LNG from the United States.
Response: Adjusting Management Policies, the Three Major Shipbuilders Strengthen Their Foundations
The CEOs of Hyundai Heavy Industries, Samsung Heavy Industries, and Daewoo Shipbuilding & Marine Engineering all believe that the world economy will remain in a period of crisis in 2013, and the downturn in the shipbuilding and maritime markets may become "protracted." Therefore, companies need to take measures to respond and strive for the best possible results.
Hyundai Heavy Industries stated that it will establish a "flexible production system" to respond to crises and changes year-round, strengthen its sales capabilities, fundamentally improve its "constitution," and the priority goal for each business division is to secure sufficient workload. To this end, it will conduct "offensive" sales activities, accurately predicting and grasping market trends and directions in a timely manner, thereby formulating countermeasures to minimize risks. In addition, it will improve design, production processes, and technology, enhance production efficiency, optimize its talent structure, comprehensively reduce production costs, and reform traditional working methods to transform high-cost, low-efficiency departments into low-cost, high-efficiency ones.
To this end, Hyundai Heavy Industries CEO Lee Jae-sung proposed this year's management policy: strengthen "substantial management" to cope with the deterioration of the internal and external business environment; build a system to respond to long-term crises to address increased uncertainty and instability in the economic climate; establish and pursue an industrial strategy of "differentiation" from competitors in business operations; strengthen core capabilities through screening and concentration; promote safe production; and continue efforts to establish harmonious labor-management relations.
Daewoo Shipbuilding & Marine Engineering CEO Koh Jae-ho stated that to respond to crises and challenges, all employees must have greater enthusiasm, be thoroughly prepared, strictly fulfill promises to customers regarding product quality and delivery dates, and enhance the market's trust in the company. As the world economy "turbulently navigates" unstable currents, Daewoo Shipbuilding's competitive "tendons" are energy-efficient and environmentally friendly ships, onshore and offshore engineering projects, and wind power generation equipment. The company will continue to invest in R&D and production facilities in these areas. 2013 will be the first year of Daewoo Shipbuilding & Marine Engineering's "great transformation" toward the goal of becoming the world's strongest shipbuilding and marine EPCIC (Engineering, Procurement, Construction, Installation, and Commissioning) company. Koh Jae-ho proposed three management principles for Daewoo: concentrate all efforts on core business divisions, improve production processes, and emphasize a corporate culture of trust, enthusiasm, and production safety as the top priority.
Samsung Heavy Industries CEO Park Dae-young stated in his New Year's address that the company's order target for ships and offshore engineering this year will reach $13 billion, with offshore engineering orders alone exceeding $10 billion. He said: "The shipbuilding market will continue to be sluggish. We will shift the重心 of the shipbuilding industry from ship construction to offshore equipment, integrate the R&D and design organizations for shipbuilding and offshore equipment, and thereby establish a复合 production system for ship construction and offshore equipment. We will secure sufficient R&D and design personnel at all levels while collecting timely and accurate information on major materials and equipment for ships and offshore engineering. Onshore and offshore wind power equipment and deep-sea offshore equipment are Samsung Heavy Industries' two new business divisions. This year, these two new divisions must bear 'fruit,' and all related business divisions within the company must provide them with strong support."
Regarding the new year's management policies of the three major shipbuilders, comments from South Korean financial and related industry circles indicate that the conventional merchant ship market has been extremely cold in recent years, with only the onshore equipment and offshore equipment markets showing some vitality. In response to this market environment, Korean shipbuilders will continue to focus their order-taking efforts on this area this year. Additionally, these companies will actively capture market share in the energy-efficient environmentally friendly merchant ship and onshore/offshore wind power generation equipment markets.
Reportedly, the order target amounts for Hyundai Heavy Industries, Samsung Heavy Industries, and Daewoo Shipbuilding & Marine Engineering this year are $29.7 billion (including Hyundai Samho Heavy Industries), $14.2 billion, and $13 billion, respectively.
(Source: Internet)
