The Korean domestic shipbuilding industry will place its management focus on boosting profitability this year away from the competition for expansion last year. The Korean shipbuilders enjoyed a record boom last year amid the prosperous market and the weakened competitiveness of their major foreign rivals such as Japan and Europe, but their profitability has deteriorated. This year, local shipbuilding companies decided to concentrate their energy on winning orders for high value-added ships and improving productivity, and adjusted their sales targets downwards.
Hyundai Heavy Industries (HHI) confirmed its world-top position by receiving a record of $5.1 billion worth of orders last year. But the company set its sales target at $3.3 billion this year, 45 percent down from last year. “We no longer find it meaningful to compete for obtaining more orders in the situation where Korean shipbuilders have already secured work to do for the next two and a half years," said a HHI official. He said that the company would focus on taking orders for high value-added ships to maximize the profitability. As part of efforts to secure the technological competitiveness required for building high value-added products, HHI has set aside 115.4 billion won ($96 million) for investments in research and development activities, 31.9 percent up from last year.
Last year, Samsung Heavy Industries accepted orders totaling $3.6 billion won but lowered its target for this year to $2.8 billion won. Orders for high value-added ships such as extra-large container ships, gas carriers, crude oil development ships and large passenger ships made up about 44 percent of all of the company's sales. The company plans to raise the portion over 50 percent this year. Daewoo Heavy Industries also set its sales target at $2.8 billion this year, down from $3.5 billion of last year.