The new head of Daewoo Shipbuilding & Marine Engineering, one of the nation’s big three shipbuilding and offshore firms, unveiled plans for a massive restructuring in its operating portfolio and a refocus on core operations after posting an operating loss for the first time in eight years in the first quarter of 2015.

“We will focus on our core business ― merchant ship, special vessel and offshore plant segment in order to avoid dispersion of resources caused by business portfolio diversification,” said new chief executive and president of DSME Jung Sung-leep, who was selected to take over the helm on Friday. The new head is scheduled to lead DSME until May 2018.

During his inaugural address, the 65-year-old stressed a drastic restructuring including selling off subsidiaries suffering from poor performance and non-core assets in a bid to recover the firm’s credibility.

The firm reportedly considered disposing of six faltering subsidiaries, including U.S.-based manufacturer of wind turbines DeWind, a wind tower manufacturing facility, DSME Trenton, DSME Construction and Future Leadership Center, which runs a golf club and training institutes.

The move came as the company has deteriorated into red ink for the first quarter this year. The country‘s second-biggest shipbuilder, had an operating loss of 43.3 billion won ($39 million) and a net loss of 172.4 billion won for the period.

“The delay in global economic recovery led to long-term stagnation in the merchant vessel market and the offshore plant market remains frozen following the plunge in oil prices,” Jung said.

He urged DSME employees to enhance efficiency and expertise, saying that low productivity caused by their negligence is becoming a more serious threat than such external environmental factors.

Amid the industry’s protracted downturn due to chronic overcapacity, other players, such as Hyundai Heavy Industries, have also been carrying out voluntary retirement and business unit reorganization.

The world’s largest shipbuilder widened its operating losses ― 192.4 billion won in the first three months of this year from a 22.3 billion won loss a year earlier.

By Park Han-na (hnpark@heraldcorp.com)