Published : 2010-03-30 13:36
Updated : 2010-03-30 13:36
Korean shipbuilding giants are diving headfirst into the wind power industry in the face of a sharp drop in new shipbuilding orders and the formidable challenge from Chinese rivals.
Leading the pack are Hyundai Heavy Industries Co. and Samsung Heavy Industries Co. - the world`s No. 1 and No. 2 shipyards.
While Hyundai Heavy is hurrying to begin operation at its wind-facility plant here this month, Samsung Heavy has secured a bridgehead in the U.S. market and is now preparing to build a production site.
Smaller players, such as STX Heavy Industries, are also charging ahead, acquiring foreign turbine markers.
STX Group said yesterday that STX Windpower has received orders to make six wind power facilities for a Romanian power provider. It did not disclose the contract value. STX Heavy has acquired Harakosan Europe B.V., the Netherlands-based wind turbine maker, for about 24 billion won ($20 million) in July and changed its name to STX Windpower.
"Based on STX Windpower`s technological prowess, we plan to build our wind power business to form the core of our new growth engines," the group said in a press release. STX Heavy has also established a wind power division in order to nurture the business.
Last month, Hyundai Heavy signed a contract with U.S.-based Wave Wind to provide six 1.65MW wind turbines, which will be produced at its plant in Gunsan, North Jeolla Province. The two companies have also agreed to expand cooperation in the 100MW capacity wind turbine project, a boost for the Korean firm which is seeking to get a bridgehead in its push into the U.S. wind power market.
Samsung Heavy aims to join the world`s top seven wind-turbine makers by 2015, expanding its capacity gradually to 800 units a year. It plans to increase ten-fold the number of employees in the wind business by then.
In April, Samsung Heavy nabbed a letter of intent from US-based Cielo Wind Power to buy three turbines next year. It is currently scouting for a plant site, and will make 200 turbines next year with capacities ranging between 2.5 and 5 megawatts.
Daewoo Shipbuilding and Marine Engineering Co. also acquired a controlling stake of DeWind Turbine in August, a U.S.-based wind power company, for 49.8 billion won.
"By combining DSME`s know-how in design and DeWind Turbine`s wind power technology, we are confident to make a fast advance in the field," Nam Sang-tae, the company`s CEO said. The company plans to pour $700 billion into the U.S. firm for the development of new products and plans to build a new production base in the North American region.
Korean shipbuilders are shifting their business focus to wind and other green energy, as the global outlook for the shipbuilding industry appears cloudier over the next few years. The technology to make key components for wind turbines is similar to those used to make ship propellers, industry officials said.
Signaling more dark clouds over the shipbuilding market, CMA CGM, the world`s third-largest container shipping line based in France, is said to be considering announcing a year-long moratorium on debt repayments and canceling orders including those it has placed with Korean shipbuilders.
Furthermore, Korean shipyards` global market dominance is being threatened by Chinese players. Currently, seven of the world`s top 10 shipbuilders, including Hyundai, Samsung, DSME and STX, are based in Korea.
China, backed by cheap labor and resilient domestic demand, is expected to soon topple Korea as the world`s No. 1 shipbuilding nation. The country is building the world`s largest shipbuilding complex near Shanghai with construction completion due in 2015.