Korean Shipyards Cut Costs to Boost Profit
South Korea's Hyundai Heavy Industries (HHI) and Samsung Heavy Industries (SHI) said that they will strive to boost their profitability via increased orders and continued cost-cutting measures, reports Yonhap.
According to Park Dae-young, president of SHI, the shipyard will continue to work toward efficient management while implementing its self-rescue measures as scheduled. "In order to survive, we will make efforts to secure competitiveness and boost profits," Park said.
HHI also said the company will work to increase its own competitiveness in the global shipbuilding sector. The shipyard said it aims to secure sales worth 14.9 trillion won (US$13.3 billion) this year.
The country's top three shipyards suffered a combined operating loss of 8.5 trillion won in 2015 due largely to increased costs stemming from a delay in the construction of offshore facilities and the drawn out slump.
The industry’s downturn has been particularly harmful to South Korea, where shipbuilding is a national industry. The shipbuilding industry, once regarded as the backbone of the country's economic growth and job creation, has been reeling from mounting losses caused by an industry-wide slump and increased costs.
Overall, the industry accounts for seven percent of South Korean exports and five percent of the nation’s employment.
Last week, South Korea’s state banks have unveiled an ambitious KRW2.9trn ($2.6bn) bailout package for Daewoo Shipbuilding and Marine Engineering (DSME) which is struggling to overcome huge losses from offshore projects.
