Surging newbuild orders and a ballooning backlog have prompted Hyundai Heavy Industries (HHI) to resume operations at the Gunsan shipyard in the southwestern port city of Gunsan, which was shut in 2017.

In a ceremony attended by President Moon Jae-in on Thursday in Gunsan, North Jeolla Province, South Korea’s largest shipbuilder announced operations at the Gunsan shipyard will resume in January, five years after the facility was shut down due to a downturn in the shipbuilding industry.

During the ceremony, HHI signed agreements with the North Jeolla provincial government and the Gunsan city government paving the way for reopening of the shipyard. “After finishing preparatory works by the end of this year, we will hire 750 workers to produce 100,000 tons of blocks for large container ships annually, starting in 2023,” said Han Young-seuk, HHI CEO.

He added that the company intends to inspect the facility and equipment to create a safer workplace.

After investing $1 billion to construct the Gunsan shipyard on a 450-acre site in 2010, HHI shut down the facility in 2017. At the time of its closure, the shipyard had a workforce of 650 employees, who were offered voluntary redundancy. Those who chose to stay were transferred to the company’s Ulsan shipyard.

A boom in newbuild orders last year saw Korean shipbuilders win orders totaling 17.5 million compensated gross tonnage (CGT), up 113 percent from the previous year.  It was the best year for orders for South Korea’s three major shipbuilders in eight years. The Big Three – including Korea Shipbuilding & Offshore Engineering Co. (KSOE), HHI’s parent company – bagged a combined $46 billion worth of orders during the year, far more than their combined order target of $32 billion.

President Moon said the reopening of the Gunsan shipyard is a significant milestone and is part of the Korean government plans to drive the growth of the shipbuilding industry by focusing on high-value ships.

“Once the Gunsan shipyard starts producing blocks for LNG- and LPG-fueled vessels, it will further increase our country’s market share in manufacturing environment-friendly ships, where we have overwhelmed competitors,” he said.

He added that South Korea aims to increase its global market share in shipbuilding to 75 percent by 2030, a target that will be driven by improving core technologies for low-carbon vessels and bracing for the era of zero-carbon vessels, including ships powered by hydrogen and ammonia.

The Gunsan shipyard is expected to play a significant role in reviving the economy of North Jeolla Province as it has the potential to generate $1.6 billion in economic activity when it is fully operational.

Source: The Maritime Executive