South Korean shipbuilding giants HD Korea Shipbuilding & Offshore Engineering (HD KSOE), HD Hyundai Heavy Industries (HHI) and HD Hyundai Mipo (HMD) have approved a merger agenda to enhance global competitiveness and expand orders in the shipbuilding and defense sectors.
Following an extraordinary general meeting and merger review process, HHI and HMD will relaunch this December as the consolidated HHI.
This restructuring aims to maximize both quantitative and qualitative synergies, expand and diversify markets, and secure a decisive competitive edge in the fiercely contested global market through the preemptive development of advanced technologies.
In particular, the merger is set to provide HHI with a major opportunity to strengthen its competitiveness in the defense sector, which has been drawing increasing global attention. HHI wants to combine its knowledge with HMD’s optimized dock facilities, equipment, and skilled workforce.
HHI has set a goal of achieving KRW 10 trillion in annual defense revenue by 2035. The shipbuilder also plans to integrate both companies’ track records to further broaden market entry and share in the specialized vessel market, such as icebreakers, where demand is growing with Arctic development.
Furthermore, HHI seeks to lead the paradigm shift driven by environmental regulations by working on eco-friendly innovations.
Scheduled to be established in Singapore this December, the new entity will serve as a regional hub overseeing overseas production sites such as HD Hyundai Vietnam Shipbuilding, HD Hyundai Heavy Industries Philippines, and HD Hyundai Vina (tentative name). It will manage overseas operations, including new yard development and business cooperation.
“This restructuring reflects our strategic vision to broaden markets and strengthen shipbuilding. With the launch of the consolidated entity, we will drive market expansion and secure unrivaled technologies to lead the future shipbuilding industry,” said an HD KSOE official.
In April this year, HHI signed several contracts with American companies to support maritime defense projects. One of the contracts was inked with the largest military shipbuilding company in the US, HII. Specifically, the partners signed a Memorandum of Understanding (MoU) to collaborate on accelerating ship production in support of defense and commercial shipbuilding projects.