Hyundai Engineering’s new business keywords: Hydrogen, mini reactors

Hyundai Engineering Co., the plant engineering and construction unit of South Korea’s Hyundai Motor Group, is reorganizing its business structure with a focus on eco-friendly projects such as hydrogen and mini reactors.

The company said on Monday it is further expanding its blue hydrogen and micro modular reactor (MMR) businesses with an aim to have those sectors account for 10% of its annual sales and a profit margin of 20% by 2025.

Currently, plant engineering and infrastructure construction take the lion’s share of its business portfolio at 45.5%, followed by building and housing works (43.5%) and asset management and other businesses (11%).

In July of 2021, Hyundai Engineering Chief Executive Kim Chang-hag launched a green environment and energy (G2E) division to pursue eco-friendly businesses, and early this year it placed its hydrogen business division under the G2E department.

The move comes after the company last year partnered with Green Investment Group (GIG) to jointly develop renewable energy power generation projects. GIG, initially launched by the UK government, is now owned by Macquarie Group and specializes in green infrastructure investment.

GREEN INITIATIVES

Hyundai Engineering has been striving to transition into an eco-friendly company for sustainable growth in line with an industry-wide push for green initiatives.

According to the International Energy Agency, the global hydrogen demand is forecast to rise from 90 million tons in 2020 to 200 million tons in 2030 and 530 million tons by 2050.

Hyundai Engineering said in December it is spending 400 billion won ($336 million) to build a plant to produce hydrogen from plastic waste.

The plastic recycling plant, expected to start commercial production in 2024, can process 100,000 tons a year of plastic waste to make 22,000 tons of hydrogen annually, enough to power 150,000 hydrogen-fueled vehicles to run 14,000 km each.

The company is also working on carbon dioxide capture and storage systems to utilize the greenhouse gas emitted as a byproduct from the factory.

In a related business, Hyundai Engineering is active with its project to generate hydrogen from ammonia.

DEAL WITH CANADA’S USNC

More recently, the company secured exclusive engineering, procurement and construction (EPC) rights for micro modular reactor projects of Canada’s Ultra Safe Nuclear Corp.

With a $30 million equity investment, Hyundai Engineering will build mini reactors in Toronto for USNC.

MMR is a fourth-generation nuclear energy generation system that delivers safe, clean and cost-effective electricity and heat as well as hydrogen. MMR is one of the leading small modular reactor (SMR) projects in Canada.

Hyundai Engineering has said it will secure funds for its eco-friendly projects through an initial share sale planned for next month.

The unlisted company plans to float 16 million shares at a price between 57,900 won and 75,700 won apiece on Korea’s main bourse to raise as much as 1.2 trillion won.

Bookbuilding with institutional investors is scheduled for Jan. 25-26, ahead of retail subscriptions on Feb. 3-4. Mirae Asset Securities Co., KB Securities Co. and Goldman Sachs are the IPO managers.

Write to Jeong-Jin Eun at silver@hankyung.com
In-Soo Nam edited this article.