At a recent briefing to reporters, FSC chairman Yim Jong-yong shrugged off the merger of Hyundai Heavy Industries (HHI), Samsung Heavy Industries (SHI) and Daewoo Shipbuilding & Marine Engineering (DSME).
“Those big three companies are all under restructuring and a potential big deal will harm all of them,” Yim was quoted saying. “A pre-condition for a big deal is all of those companies undergo restructuring thoroughly and stand on their own. However, they are not in such a condition.”
He added that having three separate big shipbuilders would allow South Korea to maintain its status as a global shipbuilding powerhouse.
Yim mentioned in particular that the embattled DSME needs to be kept afloat and not allow the yard to go bankrupt. The FSC has projected a global shipbuilding industry recovery to happen in 2018, and the yards have to hang on until the upturn.
In September, Clarksons Research reported that it expects the number of new ship orders worldwide to improve from 586 in 2016 to 1,322 in 2018. The IMO has also decided to enforce stricter environmental regulations of a 0.5% fuel sulphur content cap by 2020, which will spur shipowners to replace old vessels.
“By 2020, tougher environmental regulations will take effect. Given two or three years required for building a ship, orders will start increasing in the second half of 2017,” Yim said.
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