Report: Hyundai to Enter Competition for Morocco Shipyard
Reports from the Korean media indicate the HD Hyundai Heavy Industries, the holding company for the group’s shipbuilding operations, is exploring participating in the upcoming bidding for the rights to operate Casablanca’s new shipyard. It is part of an international strategy by the group, which has already seen it expand into Vietnam and the Philippines, and recent agreements for cooperation in India, the United States, and Peru.
Morocco’s National Port Agency last year announced the competition for the rights to develop and operate a new shipyard at North Africa’s busy port. It cited the strategic location of Casablanca as well as the strong demand, especially in the ship repair sector. It notes the lack of available space in key locations, including the Canary Islands.
The initial goal of the facility was to have a capacity to dry dock 22 vessels per year, as well as having cranes to handle 400 to 470 vessels a year at dockside. The lifting platforms would be able to handle six medium-sized boats up to approximately 5,000 tones. It estimated an investment of as much as $92 million would be required, with the government agency reporting it had budgeted $76 million for the project.
The National Ports Agency decided that the best course of action would be to launch an international competition for companies with at least 10 years of experience operating facilities similar to the one planned in Casablanca. The tender proposal outlines a facility that will encompass 21 hectares. It will include a dry dock with dimensions of 244 x 40 meters (800 x 131 feet), a lifting platform with 9,000 tonnes of capacity, a 200-foot dock, nearly 2,700 feet of fitting out berths, and a strap gantry. The concession is for 30 years and calls for the development, equipping, operating, and maintaining the new shipyard.
Business Korea reports HD Hyundai Industries is considering placing a bid, with reports indicating other expected bidders will include France’s Naval Group and Spain’s Navantia. The shipyard will be the largest in Africa.
In addition, Morocco is reported to be promoting the growth of its domestic fleet tied to the shipyard. It is reported to be seeking 100 new merchant vessels by 2040 to promote foreign trade.
Hyundai has been reported to be positioning itself as a potential contender for Morocco’s planned naval shipbuilder efforts, and now it is looking to also leverage the opportunities in commercial shipping. According to the reports, Hyundai currently has a backlog of nearly three years with over 450 vessels. It has also been looking for ways to become more cost-competitive.
The strategy, according to Business Korea, is to expand the operation globally. This could be the company’s entry into the European market, and initially, they are reported to be looking for concession agreements to lower the total investment costs. HD Hyundai recently signed an agreement with India’s Cochin Shipyard, and the report says they are now exploring shipbuilding in India. It also recently announced a new partnership with the U.S.’s Edison Chouest, and in Peru, it is in a partnership to build new submarines.
It will not be the first time a South Korean company has sought to build a global shipbuilding company. STX launched a rapid growth effort and by the early 2000s was buying shipyards. It acquired the bankrupt Daedong Shipbuilding Company in 2001 and then took control of Akers, including in Finland, where it launched STX Europe. In France, it invested in Chantiers de l’Atlantique, which became STX France. It was hit hard by the downturn in shipbuilding and the financial crisis later in the decade, and by 2013 was seeking financial protection in the courts. The European yards were sold, and the yard in Korea was eventually relaunched as K Shipbuilding, which itself is rumored to be for sale after a financial turnaround in the past few years.