Once ranked among the world's top 10 shipbuilders by order volume, mid-sized shipbuilder HSG Sungdong Shipbuilding is making a fresh attempt at shipbuilding. After being acquired by HSG Heavy Industries in 2020, HSG Sungdong Shipbuilding focused on the production of ship blocks (assembly components) and offshore wind power equipment. Recently, they returned to the shipbuilding market as Samsung Heavy Industries decided to commission them for tanker construction.
According to the shipbuilding industry on the 17th, HSG Sungdong Shipbuilding signed a memorandum of understanding with Samsung Heavy Industries on the 4th regarding tanker construction. The cooperation will involve HSG Sungdong Shipbuilding commissioning the construction of tankers that Samsung Heavy Industries orders. Until now, HSG Sungdong Shipbuilding has been making and supplying blocks to large shipbuilders like Samsung Heavy Industries. This will be the first time they will be entrusted with the entire ship from start to finish.
Samsung Heavy Industries is expected to entrust the first batch to HSG Sungdong Shipbuilding within the year. Currently, there are 21 tankers in Samsung Heavy Industries' order backlog. As Samsung Heavy Industries increases its order volume, it has begun external production, including commissioning the construction of its first tanker at the Zhoushan Shipyard in China at the end of last year. HSG Sungdong Shipbuilding is expected to receive part of the order for medium-sized tankers, including Suezmax-level ships (the largest ships capable of transiting the Suez Canal).
A representative from Samsung Heavy Industries noted, "The commissioning of ship construction is not a short-term decision, but one made with the intention of long-term cooperation and mutual growth." A representative from HSG Sungdong Shipbuilding said, "Details such as the number of ships, unit price, and scope of the contract are still in the stage of being adjusted."
HSG Sungdong Shipbuilding has regained the ability to build complete ships at its large yard of 1.2 million square meters (about 363,000 pyeong) at the Tongyeong shipyard in Gyeongnam. HSG Sungdong Shipbuilding entered court receivership in 2018 due to the downturn in the shipbuilding industry and the aggressive low-priced competition from Chinese companies. Its corporate rehabilitation process was concluded following its acquisition by HSG Heavy Industries, a manufacturer of marine plants and shipbuilding materials, in 2020.
HSG Sungdong Shipbuilding subsequently ventured into the offshore wind equipment business. Recognizing that the production of the substructure for offshore wind turbines is similar to shipbuilding, they diversified their business area into offshore wind substructures by utilizing existing production facilities. Last year, 74% of their total revenue of 318.8 billion won came from wind power business. They also secured an investment of 210 billion won from private equity funds and others in April.