Samsung Heavy Industries’ Geoje Shipyard (Courtesy of Samsung)
Samsung Heavy Industries Co., a leading South Korean shipbuilder, is set to resume investments in its China-based facilities while considering launching vessel repair services in Southeast Asia.
The company will invest up to 18 billion won ($13.1 million) to build manufacturing facilities for tanks, which are required for very large ammonia carriers (VLACs), in Rongcheng, China, industry insiders said on Sunday.
Samsung Heavy has also liquidated two of its three affiliates in China since 2022 due to rising labor costs and low productivity. The company is poised to ramp up facility investments in China as it has accumulated shipbuilding order backlogs for three and a half years.
“Korean shipbuilders have been slow in global expansion since HJ Shipbuilding & Construction Co., formerly Hanjin Heavy Industries, faced capital erosion in its Filipino operations in 2019 amid the shipbuilding industry downturn,” a shipbuilding industry source said.
“The shipbuilders resume their overseas facility expansions, investing in more diversified areas such as engine production, special purpose ship manufacturing and vessel modification,” the source added.
Samsung Heavy has also created a task force to expand its aftermarket services such as maintenance, repair and modification of vessels to meet growing global demand. The company enjoys increasing demand for aging liquefied natural gas (LNG) carrier modifications to use them as floating liquefied natural gas (FLNG) carriers, sources said.
The company is considering partnering with Southeast Asian shipbuilding companies to start aftermarket services in the region. It has repaired 100 out of 1,300 ships delivered to its clients and plans to fix more vessels.
By Hyung-Kyu Kim
khk@hankyung.com
Jihyun Kim edited this article.
