Big 3 lower annual order target

The three major South Korean shipbuilders, commonly referred to as the ?Big 3,? are thought to be lowering annual targets despite their top technical skills because of tightened conditions in the global shipbuilding business.

Samsung Heavy Industries disclosed that it planned to win $10 billion worth of orders for vessels, which is a 33.3 % downward adjustment from the $15 billion set as the company?s target in 2008. Daewoo Shipbuilding and Marine Engineering, which had marked $17.5 billion as its targeted amount for orders last year, set its annual target at ?more than $10 billion? which is around 42 % lower than the preceding year.

Hyundai Heavy Industries has yet to finalize its target for orders this year, but the dominant view in the industry is that the amount will be lowered considerably from the target put forth a year ago. “It is likely that the target will be reduced as market conditions are unfavourable this year,” said a HHI official.

However, unlike smaller shipbuilders that are hovering between survival and shutdown, there is also the aspect that the leading shipbuilders have strategically chosen to set up conservative business targets. Rather than going out of their way to compete for orders by lowering ship prices, the top shipbuilders seek to concentrate on securing major orders while taking a breather for the time being. Another reason the ‘big 3’ can take the time to ?adjust their tempo? is that they have already secured work for the next three years and therefore do not face an immediate impact in sales even if the volume of orders is light.