Gunsan yard delayed

Hyundai Heavy Industries is delaying the completion of its Gunsan Shipyard in an effort to preserve cash. Hyundai officials confirmed that the yard will now be finished by February 2010 as opposed to the original completion of August this year.

Hyundai has not secured a newbuilding order since October 2008 and as a result its cash flow has begun to dry up. Earlier this year the world’s largest shipbuilder said it was cutting capital expenditure and research and development costs by nearly 25%.

Despite the delays Hyundai still expects to deliver the yard’s first newbuilding, a Capesize bulker for Germany’s Nord Capital, in February next year.

Gunsan, which will specialise in VLCC and Capesize newbuildings, is being built at a cost of KRW1.2 trillion ($950m). Some KRW422.4bn is scheduled to be invested in Gunsan this year when the main production facilities are due to be completed. The yard is designed to have an annual capacity of 28 ships, while sales are expected to eventually reach KRW2.8 trillion.

The shipyard will employ 8,400 workers directly, and is expected to create jobs for over 10,000 people in total. It will feature a one million deadweight capacity drydock, a 1,600-ton Goliath gantry crane and cover some 1.8m square metres. Gunsan has an order backlog of 33 ships from owners such as Nordcapital, Polyar Tankers, SK Shipping and Quest Maritime.