Record Ship Orders

Daewoo Shipbuilding's marine plant, ship orders likely to total $12 billion this year

Daewoo Shipbuilding and Marine Engineering Co. plans to diversify its business by taking up energy and logistics businesses, the company recently announced.
The company projects its sales would increase to around 15 trillion won by 2011 due to the expansion of its business areas, other than those related to shipbuilding and marine facilities construction.
The shipyard celebrated its founding anniversary on October 10 at its Okpo shipyard during which President Nam Sang-tae announced the company's new vision. The new future plan said the company will achieve 15 trillion won in sales in five years to grow to become tops in the world in three major sectors of its business, market share of marine installation construction, profit in sales of ships and growth volume.
The new vision showed that the shipyard will achieve 8 trillion won in sales in 2011, 3 trillion won in marine installations, and 4 trillion won in new business areas.
The shipbuilder posted 4.7 trillion won in sales last year.
Officials of the company said nothing concrete has been done, but the company intends to enter energy and logistics businesses, adding that the company sees the energy area having synergistic effects with the construction of LNG vessels.
They also said the movement of material at the shipyard is tantamount to logistics business and the company expects synergetic effect with its operations in such foreign countries as China, Nigeria, Angola, Romania and Oman, among other nations.
The officials said Daewoo Shipyard would have a hard time catching up with Hyundai Heavy in sales volume, but they hope to surpass its rival in terms of business quality. They also said the company will try to see that its profit would reach 10 percent of sales in 2011 or 1.5 trillion won.
The company declared its long-term vision at the founding anniversary in 2003, which said the company will achieve 20 trillion won in sales and 3 trillion won in operating profit by 2015. The new vision is a medium-term plan on the way to meet the 2015 goal. The company plans to meet its target through the addition of new businesses and stepped up marketing for its traditional business areas. The shipbuilder has already its new shipbuilding orders total $10 billion at the end of September.
The company recently won orders for one LNG carrier from TMT Co. from Taiwan and two LPG carriers from Brave Maritime Corp. worth $430 million. The LNG carrier is contracted to be delivered in August, 2010 and two LPG carriers in January, 2010.
The new orders brought to 41 the total number of new ships and marine plants to be built worth some $10.2 billion, renewing the record of $6.8 billion set last year. The company has work to last for three years with its order book totaling $23 billion, the company said.
What made those orders especially worthy is their quality with some 88 percent of orders being high value added projects. The orders include 14 LNG carriers, 11 VLCC, 4 super-sized container vessels, 3 drill ships, and 4 marine platforms with the average price per ship amounting to $230 million, the company said. The company said its selective strategy to go for only high value-added work has paid off.
The shipbuilder clinched orders for 7 marine plants at the price of $4.24 billion, three times the orders booked last year totaling $1.47 billion. The orders set a single year record because no shipbuilder in the world won marine plant orders in excess of $4 billion in a single year thus far.
Orders for LNG carriers came to 14 thus far this year, all of them with high value-added work, and bringing total number of LNG carriers for the company on its book to 38, the largest in the world.
President Nam said the company's total orders would be around $12 billion this year without much trouble with 4 to 5 LNG carriers under negotiation.
In the meantime, DSME signed an Operations and Management Services Agreement with the government of Sultanate of Oman to operate a ship repair dock in Duqm, Oman. The agreement empowers the Korean shipyard to manage the dock for 10 years sharing its industrial know-how accumulated over the past 30 years including advisory, managerial and operational services. nw

Executives and union leaders of Daewoo Shipping and Marine Engineering celebrate the company's 33rd founding anniversary on Oct. 10 at the Okpo shipyard; DSME employees count coins collected in the company's coil collection campaign to be given to the needy.