Shipbuilding
Technology
Prowess

DSME forecasts $ 10 bln worth
of shipbuilding orders this year

Daewoo Shipbuilding & Marine Engineering Co., which landed orders of 45 ships worth $6.8 billion, including offshore plants, last year, is projected to receive about $10 billion worth of shipbuilding orders during 2006. In particular, DSME is attaching priority on receiving orders for value-added ships like LNG carriers.
The Korean shipbuilder is making such massive facility investments as the construction of a large-sized floating dock and 3,600 ton-class sea crane in a move to enhance productivity to handle increasing shipbuilding orders. All new production equipment is expected to be in place by the middle of this year. Each dock's shipbuilding of same ship types will likely not only meet the rising orders and have an effect of maximizing productivity.
Boasting of world-class technological prowess in LNG shipbuilding, DSME has a backlog of 30 LNG carriers. During this year, the company has set its sights on receiving orders of more than 13 LNG carriers.
DSME is the world's only shipbuilder capable of building LNG-RV (Regasification Vessel). Daewoo has so far delivered two LNG-RVs and has a backlog of three more. LNG-RV is a vessel that can supply re-gasified natural gas to local consumers without the land LNG terminal.
LNG-RV owners have sent a thank-you note for only DSME's LNG-RV to supply energy when Hurricane Katrina battered the United States. LNG-RV was listed as one of the top 10 New Technologies announced by the Korean government last year.
Prices of the plate, one of the most essential raw materials in the shipbuilding industry, have showed signs of a little decline. The company plans to hedge 70~100% against foreign exchange fluctuations to maximize profits.
DSME made remarkable technology advancements during 2005. The company has been building ships on the ground, a departure from the conventional shipbuilding at the dock. It has succeeded in its own design and production of the cargo sector of the LNG carrier, completing the localization project.
DSME is taking a lead in technological developments of shipbuilding at home and abroad. Daewoo became the first shipbuilder in Korea to have obtained a certificate on building CS 1 Type, next-generation cargo containment system of with a membrane system. DSME is a leading LNG carrier shipbuilder. CS 1 Type DSME is a combination of the strengths of each of the two mainstay Membrane types - N096, built by DSME and MARK III, constructed by Samsung Heavy Industries. It is adopting N096's INVAR plate and MARK III's polyurethane lagging to raise floor space, construction productivity and economic efficiency simultaneously.
DSME has introduced the Enterprise Resource Planning (ERP) system for the first time in the domestic shipbuilding industry with the goal of acquiring the world's best edge by grafting advanced IT technologies into the shipbuilding sector.
The ERP methodology has been popular as a means of ensuring efficient management innovations for most businesses where identical jobs have been done repeatedly.
There is a limit to the application of the management system to the shipbuilding industry in which production processes are flexible according to clients'order demands. Daewoo's ERP application has attracted a keen interest as the first case of challenging the characteristics of the industry.
There are a few cases of ERP applications in Japan and Italy, but they are limited to the so-called assembly production of such ships as military and passenger vessels. Daewoo's ERP application is about the full orderer-tailored shipbuilding that becomes a subject of benchmarking for other firms.
DSME has put into operation knowledge management system, dubbed "D-Know"last December as part of its efforts to promote knowledge accumulation and creation. During 2006, the company is making innovations by grafting ERP and D-Know into knowledge management.
Daewoo aims to post 20 trillion won in sales in 2015. To this end, DSME plans to explore new business arenas related to the existing businesses by building up a global network centering around Eastern Europe, the Middle East, Africa and East Asia. With regard to the global network, DSME headquarters in Korea serves as a hub of producing added-value vessels, business, R&D and financing. Overseas production operations are responsible for production of vessels with an edge, corresponding to the characteristics of each region. The global network system has eventually paid off: the first such success story of Daewoo Mangalia Heavy Industries (DMHI) in Mangalia, Romania. DSME and DMHI jointly landed orders of six 4,500 TEU-class containerships in March 2004. The two agreed on the collaboration project, calling for DSME to build the first and second editions and support DMHI with the construction technologies and blueprint. The deal has brought about win-win effects: the client earned economic gains; DSME secured appropriate profits; and DMHI acquired orders.
DSME signed an agreement with Oman on the construction and operation of a ship repair yard last June. The company set up a subsidiary in Yantai City, China to produce shipbuilding blocks and export them to Korea.
Daewoo is also participating in offshore oil exploration projects in Nigeria together with Korea National Oil Corporation and KEPCO.
In the world's shipbuilding market including European market and American market that sustaining the world's largest economy, the vessels built by DSME are appreciated as "ships of the finest quality"in the world. Major oil producers in the world, who have ordered large-scale projects from DSME, have expressed their unequivocal satisfaction with DSME's technological superiority, on-time delivery and the dedication of its people who spare no effort in satisfying customer requirements, as evidenced by the number of follow-up orders. nw

LNG RV1, built by DSME

An aerial view of the DSME shipyard

The BP Thunder Horse platform built by DSME

Ki Won-kang, senior executive vice president