October 26, 1999 in Social Responsibility News

SHI Has Won Orders Worth $500 Million for 8 Ships

Samsung Heavy Industries (Representative: Lee Hai-kyoo) has won orders worth $500 million for the construction of eight ships including 6 containers of 5,500 TEU class and 2 super VLCCs from European countries.

Of 6 containers, 4 come from Greece Danaos and 2 from German Nordcapital at the price of $60 million apiece. The VLCCs are from Greece Lemor at the price of $70 million apiece.

The container, measuring L263m x W 40m x D24.3m, will cruise at 25 kts per hour carrying 5,500 20-foot containers. These large sized containers will be delivered to the ship owners one by one starting from April 2001.

The 308,500 ton VLCC, to be delivered at the end of 2001, will measure L330m x W58m x D31.5m and will have a speed of 22 kts.

Especially in the case of the containers, a jump in profitability through cost retrenchment as well as enhanced productivity through repetitive construction and design is expected, since SHI has received 13 orders for the same 5,500 TEU-CLASS containers since last year.

Market analysts note that SHI has won the orders in the midst of a worldwide depression in the shipping and shipbuilding industries. Given that Japanese and European shipbuilders are experiencing difficulties doing business due to deteriorating competitiveness, we can see that Korean shipbuilders dominate the world market due to having a keen competitive edge and superior technology.

Through these orders, SHI has registered a total of 31 orders equivalent to 1.8 million tons until the present time, thus securing a total of 72 ships equivalent to 4.8 million tons, which will take SHI more than two and a half years' run.

While the Japanese shipbuilders are hesitant to enter competition with the yen on the rise, Korean shipbuilders are expected to receive more orders because they have an price advantage over their Japanese counterparts, since construction costs are on the rise by $2 to $5 million, according to the type of ships.

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