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Shipping & Shipbuilding

Hanjin Heavy wins $270 mn container ship order, first deal in 6 years

The latest deal marks the mid-sized shipbuilder’s return to the commercial vessels market

By Oct 05, 2021 (Gmt+09:00)

Hanjin Heavy's 5,500 TEU container ship
Hanjin Heavy's 5,500 TEU container ship

Hanjin Heavy Industries & Construction Co. said on Tuesday it has won a $270 million deal to build four 5,500 TEU container ships for a European company, resuming its construction of commercial vessels after six years.

Under the deal, Hanjin Heavy will deliver the state-of-the-art, eco-friendly vessels by November 2023, the company said in a regulatory filing.

The mid-sized South Korean shipbuilder has focused on military ships and other special-purpose vessels such as research boats since it entered a debt restructuring agreement with creditors in 2016.

In August, the state-run Korea Development Bank and other creditors of the shipbuilder completed a deal to sell a 66.85% stake in the company to a consortium led by local builder Dongbu Corp.

Hanjin Heavy was put up for sale in September 2020 as the company was reeling from financial difficulties after its Subic shipyard in the Philippines posted massive losses in the past few years due to a sharp fall in new orders amid a protracted slump in the global shipbuilding industry.

Hanjin Heavy Industries' Yeongdo Shipyard in Busan, South Korea
Hanjin Heavy Industries' Yeongdo Shipyard in Busan, South Korea

The latest deal comes as Korea’s shipbuilding sector is recovering from a years-long slump thanks to a rebound in the global shipping industry.

“This contract will pave the way for our solid growth in commercial vessels as well as military ships,” said a company official.

Hanjin Heavy said it will redouble its efforts to also secure orders for liquefied natural gas (LNG) carriers, liquefied petroleum gas (LGP) ships, as well as petrochemical and oil carriers.

Write to Jung-hwan Hwang at jung@hankyung.com

In-Soo Nam edited this article.

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