[Hyundai Heavy]
SEOUL -- Hyundai Heavy Industries, the world's largest shipbuilder, received an order from a South Korean shipper to build eight large container ships as part of a government scheme to rehabilitate domestic shipbuilders which have been put under painful restructuring to reduce their debt.
Hyundai Merchant Marine, the country's top shipping company controlled by creditors, said Monday it sent out orders for 20 very large container ships to Hyundai Heavy Industries, Daewoo Shipbuilding & Marine Engineering and Samsung Heavy Industries. The total value of orders is estimated at three trillion won ($2.8 billion).
Hyundai Heavy received an order to build eight 14,000 twenty-foot equivalent unit (TEU) container ships by the second quarter of 2021. Daewoo Shipbuilding and Samsung Heavy were asked to build seven and five 23,000 TEU container ships by the second quarter of 2020 respectively.
Under a government-sponsored program to help domestic shipyards, South Korean shipping companies will place orders for 200 ships worth eight trillion won for five years. Hyundai Merchant will acquire eco-friendly container ships to meet new rules imposed by a U.N. maritime safety agency on the amount of sulfur take effect.
South Korean shippers have been in trouble due to falling freight rates stemming from an oversupply of ships and a protracted slump in the global economy. In February last year, Hanjin Shipping which used to be South Korea's top container carrier terminated its 40-year-long business.
Kim Young-moo, vice chairman of the Korea Shipowners Association (KSA), said earlier that Hanjin's liquidation was a big policy mistake made by the government of ex-president Park Geun-hye because it weakened the competitiveness of South Korean shippers and helped foreign rivals increase their clout. Hyundai Merchant has absorbed some of Hanjin's assets to lead the domestic shipping industry.
reporter
Lim Chang-won
cwlim34@ajunews.com
