Shipbuilders Tap into Alternative Energy Sector

Monday, Dec 01, 2008

With a sense of crisis engulfing Koreas once bustling shipyards, the countrys major shipbuilders are now looking at diversifying their business by advancing into the alternative energy sector.

The idea is that a move to find a new growth engine will reduce the risk of collapse amid the global recession.

The worlds no. 1 shipbuilder Hyundai Heavy Industries invested W34 billion (US$1=W1,480) in its first solar cell-producing plant in Eumseong, North Chungcheong Province in May and will spend W300 billion to build a second plant by 2010. The company also plans to spend about W100 billion to build the nations largest wind-power plant in Gunsan, North Jeolla Province slated to be completed by September next year.

Samsung Heavy Industries is looking at entering the wind power sector, prompted by the idea of implementing propeller and blade technologies used in shipyards in wind power generators. The firm plans to enter the market after it develops wind power plants capable of producing 3 MW of electricity inland and 5 MW at sea, probably by 2010.

Elsewhere, Daewoo Shipbuilding and Marine Engineering is strengthening activities abroad, collecting lucrative overseas construction orders such as a project in Oman to build a new town larger than the Seoul suburb of Bundang City.

Korean shipbuilders saw an almost 20 percent year-on-year drop in orders received in the first half of this year compared to a 30 percent drop in the global industry.

However, the top three -- Hyundai, Samsung and Daewoo -- managed to meet last years levels backed by strong performances in sales of offshore facilities and plants.

Source: The Chosun I1bo