Hyundai Heavy decides to shut down dockyard for offshore facilities

SEOUL -- With no more work to do, Hyundai Heavy Industries, the world's largest shipyard, made an inevitable choice Friday to close its dockyard for offshore plants, admitting it has failed to win any orders due to competition with Chinese and Singaporean rivals..

Hyundai Heavy CEO Kang Hwan-goo said that a drydock in the industrial city of Ulsan for offshore facilities such as floating production storage and offloading (FPSO) units would be shut down after it sent the last part of an offshore module for fixed platforms in an oilfield northwest of Abu Dhabi.

"We have no choice but to shut down the yard for offshore facilities until we get a new order," Kang said in a statement, adding Hyundai Heavy has lost out to Chinese and Singaporean rivals due to high costs.

"It is not easy to win new orders with our current fixed cost," he said. "The only way to overcome our crisis is to reduce the cost. An overhaul of our organization and an idle manpower are inevitable."

For its offshore plant shipyard, Hyundai Heavy has about 2,600 regular workers and 3,000 others hired by subcontractors.

For years, Hyundai Heavy has been involved in sweeping restructuring to ride out a protracted business slump. In 2017, sales were down 31 percent on-year to 15.4 trillion won (14 billion US dollars) and operating profit fell 96 percent to 14.6 billion won.

This year, the shipbuilder has predicted a slight recovery in its overall business, citing growing demands for gas-fuelled ships. With Hyundai Robotics separated as the holding company for non-shipbuilding units, the shipyard now focuses on shipbuilding, offshore drilling, and engine making.
Lim Chang-won Reporter cwlim34@ajunews.com

Lim Chang-won cwlim34@ajunews.com

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