Korea Shipbuilding & Offshore Engineering (KSOE) has set a $13.3bn newbuilding order target for its three shipyards in 2023, down by 12% from last year.
Last year, the South Korean group signed around $22.84bn worth of newbuildings contracts against its target of $15.05bn.
The scaling down this year will largely centre on Mokpo-based Hyundai Samho Heavy Industries.
Seung-Yong Park, chief operating officer and senior executive vice president of Hyundai Heavy Industries, confirmed the smaller target.
“We are expecting a lower newbuilding order volume this year as compared to 2022,” he told TradeWinds.
“The rising global inflation, coupled with recession and war between Ukraine and Russia, are factors that are not favourable to the shipbuilding industry.”
On top of the global economic uncertainty, limited slots at KSOE’s three yards mean it can contract a limited number of newbuildings.
“We have limited slots available due to last year’s shipbuilding boom,” Park said. “We need to reduce the number of vessels we contract this year, otherwise our orderbooks will be stretched for more than three years, which poses risks to the shipyards in terms of currency exchange and costs factors.”
Hyundai Samho’s new target is slashed by nearly 44% to $2.6bn. In 2022, it contracted around $8.66bn worth of newbuildings, overshooting its $4.605bn target by 88%.
Hyundai Samho’s stellar performance was due to the number of newbuilding slots that were available last year.
“In end-2021, Hyundai Samho secured fewer newbuilding orders than HHI and Hyundai Mipo Dockyard [HMD], thus we could rake in more orders for Hyundai Samho in 2022,” explained Park.
“But now the shipyard has fewer slots available to the market in 2023 compared to the other two shipyards.”
Ulsan-based HHI and HMD will see a marginal increase in their new order targets. HHI aims to secure $7bn worth of newbuilding orders, while HMD’s order target increased by $100m to $3.7bn.
HHI signed $10.41bn of contracts last year when its target was $6.95bn. HMD booked $3.799bn worth of newbuildings, exceeding its target by about 6%.
Last month, managers were said to have averted a general strike planned by unionised workers at the three yards after it offered to increase basic monthly pay by KRW 80,000 ($60.50), which falls short of the unions’ demand for a rise in excess of KRW 100,000.
