South Korean Daewoo Shipbuilding Marine & Engineering (DSME), one of the largest shipbuilders in the world by orders, could achieve 9.8 trillion won (US$9.1billion) in sales this year, according to the company’s CEO as quoted by Yonhap news agency on Monday.
The company’s initial target for 2018, as announced in early January, was to exceed USD 5 billion in orders. Now, Mr. Jung Sung-leep said he expects Daewoo Shipbuilding to receive US$7 billion worth of orders by the end of this year. In 2017, the company bagged $2 billion in new orders.
According to Mr. Jung as cited during a news conference in Seoul, DSME is currently making efforts to secure orders for offshore facilities for the rest of the year, which if realized, could help the company exceed the target.
As of the end of May, the shipbuilder had $22.4 billion worth of orders, or 96 ships, in its order backlog, which would keep its shipyards busy until the third quarter of 2020, Yonhap reported.
However, he added, key challenges for the achievement of the target is the rising shipbuilding plate prices and the won’s strength against the dollar, which affects the vessels’ export prices.
In addition, DSME expects to deliver two drill ships to Sonangol by late 2018, which could bring about 1 trillion won in payment from the Angolan oil firm, he also informed. The delivery had been originally scheduled for June and July in 2016, but was delayed due to Sonangol’s worsening financial status.
Finally, Mr. Jung said he plans to sell off two affiliates — Shinhan Heavy Industries Co. and Samwoo Heavy Industry Co.
Over the last years, the global economic downturn combined with the Chinese competition have brought implications to South Korean shipbuilding industry which has to deal with a decrease in new orders and idle workforce.
