HHI closing down offshore yard in Aug for the first time in 35 years

South Korea’s largest shipbuilder Hyundai Heavy Industries Co. that has not been able to bring home a single new order for offshore facility over the last three years said it was temporarily shutting down its offshore shipyard in August - the first closure in its offshore facility division that began operation in 1983.

“We cannot afford to run the offshore yard until we secure new orders,” Hyundai Heavy Industries said in a statement on Friday.

The company has vied in a number of tenders, but lost out to Chinese rivals.

Hyundai Heavy Industries added that it will be difficult for the company to win new orders at the current production cost and said it was vital to bring down the cost to raise competitiveness.

The company will inevitably undergo reorganization to cope with idle workers.

It will run out of work after it completes the last order achieved in November 2014 by the end of July to produce oil and gas platform for the NASR oilfield in the United Arab Emirates.

About 5,600 offshore workforce including 2,600 regular employees and 3,000 supplier workforce will become redundant.

Hyundai Heavy Industries has been going all-out to cope with dwindling backlog by reducing working hours and sending employees to take turns in taking unpaid leaves. The company is reviewing additional measures to prepare for the facility suspension.

Shares of Hyundai Heavy Industries, meanwhile, ended up 3.76 percent at 110,500 won ($99.7) on Friday.

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