ULSAN < invest Korea

According to Yonhap News,

(SEOUL=Yonhap News) Hyundai Heavy Industries Co., a major South Korean shipbuilder based in Ulsan, said Tuesday that it has clinched a deal worth 908 billion won (US$800 million) to build 10 very large ore carriers (VLOCs), marking the largest deal in five years, amid concerns of a drop in new orders.

Under the deal with Polaris Shipping Co., a local shipping firm, Hyundai Heavy will build the 325,000-ton vessels in phases by 2021, it said.

Hyundai Heavy said it may build more vessels for Polaris in the future.

Polaris Shipping has clinched a mega-deal with Vale SA, the world's largest iron ore producer, to transport iron ore. Vale was in talks with a number of global shipping firms to transport ores, which means local shipyards may receive deals to build VLOCs.

So far this year, Hyundai Heavy has bagged orders valued at $5.8 billion to build 99 ships, a sharp rise from the $2 billion worth of deals clinched a year earlier.

The agreement came as Hyundai Heavy and its affiliates implement rotational leaves for their workers to cope with a drop in workload.

South Korean shipyards, like others around the world, have been hit hard by a drop in demand for new ships in the wake of sluggish global economic growth, and low crude and gas prices in the past few years.

Local shipyards have since laid off workers through voluntary retirement programs, forced employees to take leave and even requested cuts in salaries to stay afloat.

sam@yna.co.kr

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