Embattled shipbuilder Daewoo Shipbuilding & Marine Engineering Co. plans to implement 2.5 trillion won ($2.14 billion) worth of self-rescue measures this year, larger than last year's 1.6 trillion won, as it strives to stay afloat amid a sharp fall in new orders, company officials said Monday.
As part of the measures, the shipyard plans to cut its workforce by some 2,000 this year to some 8,500 in total by the end of the year, and accelerate its move to spin off its non-core business units such as its IT division.
Last year, Daewoo Shipbuilding cut the number of employees by 2,000 to 11,200 as of end-December, they said. Daewoo Shipbuilding is also seeking to sell assets worth some 500 billion won, including buildings and floating docks.
Last year, Daewoo Shipbuilding said it would implement its self-rescue measures totaling 6 trillion won by 2019.
Meanwhile, the shipyard is aiming to clinch new orders worth $5.5 billion this year. Last year, it aimed to bag $6.2 billion worth of orders, but only secured a meager $1.55 billion worth of shipbuilding deals.
Daewoo Shipbuilding is expected to have seen its operating losses narrow last year on the back of its tough restructuring measures, including job reduction and asset sales.
The shipyard is expected to have logged an operating loss of 528 billion won on sales of 13.12 trillion won last year, according to Daishin Securities, which compares with an operating loss of 2.94 trillion won and sales of 15 trillion won the previous year.
South Korean shipbuilders have been under severe financial strain since the 2008 global economic crisis, which sent new orders tumbling amid a glut of vessels and tougher competition from Chinese rivals.
The country's top three shipyards -- Hyundai Heavy Industries, Samsung Heavy Industries Co. and Daewoo Shipbuilding & Marine Engineering Co. -- suffered a combined operating loss of 8.5 trillion won in 2015. The loss was due largely to increased costs stemming from a delay in the construction of offshore facilities and an industrywide slump, with Daewoo Shipbuilding alone posting a 5.5 trillion won loss.
The shipbuilders have drawn up sweeping self-rescue programs worth 11 trillion won in desperate bids to overcome the protracted slump and mounting losses. (Yonhap)