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Hyundai Heavy seeks to diversify business portfolio to sharpen competitive edge

All News 16:14 October 08, 2020

By Nam Kwang-sik

SEOUL, Oct. 8 (Yonhap) -- With COVID-19 routing the global shipbuilding industry, shipbuilding giant group Hyundai Heavy Industries Group has been aggressively building up its business portfolio via mergers and business tieups to sharpen its competitive edge.

The shipbuilding giant has been going ahead with the acquisition of its smaller local rival Daewoo Shipbuilding & Marine Engineering Co. since March 2019, but antitrust watchdogs from South Korea and three of five other countries that must give their approval, including the European Union, have yet to give the nod for the deal that would create a seismic shift in the global shipbuilding sector.

Should Hyundai Heavy acquire the second-largest shipbuilder, the shipbuilding conglomerate will have four shipbuilders -- Hyundai Mipo Dockyard Co., Hyundai Heavy Industries Co., Hyundai Samho Heavy Industries Co. and Daewoo Shipbuilding -- under its wings.

This file photo provided by Korea Shipbuilding & Offshore Engineering Co. shows a shipyard of Hyundai Heavy Industries Co. in Ulsan, 414 kilometers southeast of Seoul. (PHOTO NOT FOR SALE) (Yonhap)

But given increased uncertainties stemming from the new coronavirus outbreak, Hyundai Heavy is now on a path toward stepping up its portfolio to overcome a slump in the shipbuilding segment and boost its competitiveness.

Last month, the shipbuilding group submitted an initial bid for the country's No. 1 construction equipment maker Doosan Infracore Co., which has been put up for sale. Hyundai Heavy already has the country's second-largest construction equipment manufacturer Hyundai Construction Equipment Co. under its wing.

"If Hyundai Heavy Industries Holdings takes over Doosan Infracore, Hyundai Construction Equipment will benefit from technologies and sales networks of Doosan Infracore," said Lee Dong-heon, an analyst at Daeshin Securities Co., in his recent report.

This photo provided by Hyundai Heavy Industries Co. shows a liquefied natural gas (LNG) carrier built by the shipbuilder. (PHOTO NOT FOR SALE) (Yonhap)

The shipbuilding giant has also set sights on new business with the cooperation of KT Corp., a major South Korean mobile carrier, in the robot industry.

Last June, Hyundai Robotics Co., a wholly owned robotics unit of Hyundai Heavy Industries Holdings Co., signed a deal with KT to cooperate in the robot business.

Under the deal, Hyundai Robotics will develop the bodies of robots, while KT will focus on software development using its 5G network, artificial intelligence (AI) and big data solutions.

Hyundai Robotics will expand its business line from industrial robots to service robots to be used in hotels, cafes and homes.

Also, the shipbuilding group's oil refining unit, Hyundai Oilbank Co., plans to increase electric vehicle (EV) charging stations to 200 units by 2023 from the current 20 in operation at its gas stations through a partnership signed with Charzin, a local maker of EV chargers.

Korea Shipbuilding & Offshore Engineering Co., the group's subholding company, is seeking to sell its industrial boiler maker Hyundai Heavy Industries Power System Co. as part of efforts to reorganize its business portfolio.

ksnam@yna.co.kr
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