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| Hyundai Heavy Industries Ulsan shipyard / Courtesy of Korea Shipbuilding & Offshore Engineering |
By Kim Hyun-bin
Korea Shipbuilding & Offshore Engineering (KSOE) is restructuring its global production strategy by forging partnerships with companies in the Middle East and Russia, company officials said Wednesday.
The world's leading shipbuilder has been partnering with global shipyards and transferring technology so as to receive royalties rather than competing to fully procure big ship building projects in major ordering countries.
"All the technologies we export are commonly used among shipbuilders so it is better to transfer and receive royalties from countries instead of trying to compete with China's low prices such as bulk carriers," a KSOE official said. "Then we can concentrate more on developing high value added carriers such as LNGs."
The IMI shipyard project, which is scheduled for completion next year, is a joint venture between KSOE and the Saudi government, and Saudi Engines Manufacturing Company (SEMC).
The IMI project is a mega-sized shipyard which KSOE is building in the King Salman shipbuilding industrial complex in Saudi Arabia, as a result of a partnership agreement in 2017, with Saudi state-run energy company Aramco, state-owned shipping company Bahri and the UAE energy company Lamprell.
President Moon Jae-in also mentioned the shipyard as a representative case of economic cooperation between the two countries during his state visit to Saudi Arabia in January.
IMI Shipyard is the first overseas shipyard built by a Korean shipbuilder that is operated purely on 'royalties'. KSOE participates as a licensor that provides technology to the project, which is estimated to be worth at least 5 trillion won, and secures 20 percent and 30 percent stakes in IMI and SEMC, respectively.
In 2019, the company signed a contract with IMI to sell design drawings and construction technologies for very large crude-oil carriers (VLCC). This is a structure in which the shipyard receives royalties every time it builds a VLCC. IMI has already secured the supply of more than 50 crude oil carriers from Aramco and Bahri.
Royalties also come from the engine, which is a key piece of equipment. SEMC pays royalties to produce the 'Himsen Engine,' a mid-size marine engine developed by KSOE with its own technology. It plans to produce about 200 marine engines annually.
Prior to Saudi Arabia, KSOE opened the door for technology export by being involved in the modernization project of the Zvezda shipyard that the Russian government is aiming to strengthen. Hyundai Samho Heavy Industries established Zvezda-Hyundai, an engineering joint venture in 2017, and built a mid-sized Aframax class tanker together with Zvezda, and succeeded in delivery last year.
