Daewoo in expansion mood

Daewoo Shipbuilding and Marine Engineering (DSME), South Korea’s most profitable shipbuilder, is planning to expand its global network through acquisitions. “We are considering boosting our overseas presence by acquiring small and medium shipbuilders in China, Brazil and Angola,” DSME president Jung Sung-leep said.

DSME, the second-largest shipbuilder in the world, acquired the Mangalia Shipyard in Romania in 1997, which has been used for repairing ships and will begin building container vessels soon. Brazil, which has several redundant and obsolete shipyards, will also be the target of acquisitions according to Jung. In the case of China, it is difficult to secure a 51% stake in a local shipbuilder, but DSME is working on a number of possible solutions.

The company also said it will increase its capacity for building LNG carriers from eight to 14 a year, for which it will invest about $189 million. “We aim to reach annual sales of up to 20 trillion won by 2015, of which 15 trillion will come from shipbuilding and marine engineering, and the rest from new business, maybe in energy,” he said.

Ship orders for LNG tankers may rise 50% because of a growth in global production of liquefied natural gas, due before 2009, according to shipbroker Simpson, Spence & Young. South Korean yards accounted for almost 70% of the LNG tanker order book as of the end of September while Japan ranked second with slightly less than 24% of orders.