STX Offshore & Shipbuilding Co plans to cut jobs via a voluntary retirement initiative as it looks to reduce costs on the back of a weak newbuilding market and the Covid-19 pandemic.
The midsize South Korea shipbuilder said it would be difficult to compete against rivals unless its fixed costs were released, as reported by South Korean news agency Yonhap.
The shipbuilder has not secured any new orders in the first half of the year, with an order backlog of just seven ships to be built by the first quarter of 2021.
"The overall suspension of our shipyards will be inevitable if things remain the same," the company said in an emailed statement.
"Contacting activity has been extremely limited in 2020 so far, with the Covid-19 outbreak significantly impacting investor sentiment in the newbuilding market and global travel restrictions limiting yards’ ability to conclude contracts," Clarksons said in its weekly report.
A total of 258 vessels have been reported ordered so far this year, representing a decrease of 53% year-on-year on an annualised basis, it added.
TradeWinds last reported STX Offshore winning a newbuilding order in mid-February from Greek owner Victor Restis.
His Golden Energy Management added a 50,000-dwt tanker newbuilding to its orderbook at the shipbuilder, taking its tally of MRs at the yard to three.
STX Offshore started six months of rotational unpaid furloughs for staff in June 2018, but this prompted yard workers to take industrial action in late May.
Operations at its dockyard in Jinhae, South Gyeongsang, are reported to have been halted since 17 June.
STX Offshore has been under a restructuring programme pushed by its main creditor — the Korea Development Bank — since 2013.
