Korean shipbuilders' order backlogs reach suppliers as new contracts land

Korean shipbuilding and plant-equipment companies are converting the industry's order boom into signed supply contracts, giving an unusually concrete read on what sits in the backlog.

HD Korea Shipbuilding & Offshore Engineering raised the value of a floating production unit contract for a Mexican deepwater oilfield to 1.95 trillion won ($1.44 billion) from 1.84 trillion won ($1.36 billion), it disclosed on the 30th, equal to 21.6 percent of the company's 9.05 trillion won ($6.66 billion) in recent revenue. The contract runs to June 1 next year, two months later than previously stated, and HD Hyundai Heavy Industries will carry out the work for a Mexico-based crude oil developer, with payment following construction progress. The FPU is the first deepwater field development in Mexico. It measures 94 metres long, 94 metres wide and 57 metres high, weighs about 44,000 tonnes and will produce 100,000 barrels of crude and 4.1 million cubic metres of natural gas a day, with HD Hyundai building the hull and topside turnkey.

SeAH Steel is supplying 98.1 billion won ($72.2 million) of pipe to its Canadian affiliate SeAH Steel America for natural gas transmission, a contract worth 5.4 percent of the steelmaker's 1.81 trillion won ($1.33 billion) in recent revenue. The deal began on Dec. 22 last year and was extended to Nov. 30, with 40.3 billion won ($29.7 million) delivered and 57.7 billion won ($42.5 million) still on the books as of the end of June. The pipeline runs 230 kilometres.

Hyundai Movex will supply 72 billion won ($53 million) of logistics automation modules and robots to Kumho Tire's new plant in Hampyeong, South Jeolla Province — 18.3 percent of the company's 394 billion won ($290 million) in recent revenue, with payments tied to milestones from a 20 percent advance through shop assembly, plant delivery, trial operation and final inspection. The deal runs to Oct. 31, 2028. Hyundai Movex says it has handled tyre-plant automation for Hankook Tire factories in Geumsan, Daejeon, Tennessee, Hungary, Indonesia, Jiaxing and Chongqing.

The industrial side is also moving. The Ministry of Trade, Industry and Energy opened a digital-twin centre for iron outfitting at Ulsan's Techno Industrial Complex on Sept. 30, a 19 billion won ($14 million) project split evenly between national and local funds and running from 2023 to 2027. It will render pipe, handrail and cable-tray drawings in three dimensions and link them to automated welding and cutting equipment. The ministry describes iron outfitting as essential to ship construction, but dominated by small firms doing high-mix, low-volume work that has lagged on automation.

"Digital transformation of the iron outfitting industry is not a choice but a necessity," Ulsan's economic vice mayor, Shin Min-sik, said at the opening, adding that wider use of the platform would cut safety risks and make the workplace one young people want to join. Park Dong-il, the ministry's industry policy chief, said the centre should make the sector a turning point for Korean shipbuilding.

A second facility opened the same afternoon in Yangsan, South Gyeongsang Province, to test hybrid propulsion systems that connect a shaft generator motor to the drive shaft. The ministry said Korean suppliers had depended on foreign makers for power converters, reducers and control systems.