HD Hyundai Buys Manufacturer as it Seeks Expansion in Vietnam Shipbuilding
South Korea’s HD Hyundai is continuing to pursue opportunities to grow its shipbuilding business and increase its competitive position against the Chinese. It is acquiring a Vietnamese manufacturing business for components, including tanks and cranes, while also moving to expand its Vietnamese shipbuilding and being linked to other international deals.
HD Korea Shipbuilding and Offshore Engineering has agreed to acquire Doosan Vina from Doosan Enerbility, a Vietnamese offshoot of the Korean industrial company Doosan. HD KSOE will pay $207 million for full ownership of the Doosan Vina business, which was established in 2006. The industrial manufacturer is located south of Da Nang in central Vietnam.
Doosan Vina is a manufacturer of tanks and other components for LNG plants as well as port cranes, thermal power plant boilers, and other industrial components. HD KSOE highlights the growing need for tanks that can be used with LNG and other gas carriers, as well as the next generation of eco-friendly shipping.
The acquisition comes as the company is also expanding its shipbuilding capacity in Vietnam. Its Vietnamese operations were launched as a joint venture in 1996, focused on ship repair and conversion. It completed work on over 900 ships and, starting in 2008, entered into shipbuilding. Since 2011, the operations have been totally focused on shipbuilding, with the yard mostly delivering product/chemical tankers and bulkers.
Last year, HD Hyundai announced plans to expand its shipbuilding operations in Vietnam. It has a capacity to build 12 vessels a year, which it said would be increased to 15 ships per year. It is working to improve the efficiency of the shipbuilding operation. It also said it would review the possibility of expanding the capacity in Vietnam to 23 ships per year by 2030.
Elsewhere in its international operations, HD Hyundai is in the process of restarting the former Hanjin shipbuilding operation at Subic Bay in the Philippines. Product work will resume by the start of next year, with the Philippine yard ramping up to a capacity of 10 ships per year. The company has also been linked to a bid for a developmental shipyard in Morocco, and it recently signed partnership agreements in the United States and India.
Already the largest shipbuilder in South Korea, HD Hyundai’s shipbuilding group is focused on eco-friendly future ships and is also looking to develop new capacity and capabilities to keep up with demand and competition. The Korean shipyards have lost business in recent years to the Chinese shipbuilders, who pose strong price competition.