Shipyards seek salvation in wind power

Leading Korean shipbuilders are diversifying into the wind power industry in the face of a sharp drop in new shipbuilding orders and the growing challenge from Chinese rivals.

While Hyundai Heavy is hurrying to begin operation at its wind-facility plant in Korea this month, Samsung Heavy has secured a bridgehead in the U.S. market and is now preparing to build a production site.

Smaller players, such as STX Heavy Industries, are also charging ahead by acquiring foreign turbine markers. STX Windpower, part of the STX Group, has received orders to build six 2MW wind turbines for Romania’s Atra Eco after acquiring the Netherland-based wind turbine maker Harakosan Europe B.V.. The wind turbines with a height of 80 metres will be installed in Constanta on the Romanian Black Sea coast by 2010. The diameter of the blade part stands at 70 meters. STX Heavy acquired Harakosan Europe for about 24 billion won in July and changed its name to STX Windpower.

“Based on STX Windpower’s technological prowess, we plan to build our wind power business to form the core of our new growth engines,” the group said in a press release. STX Heavy has also established a wind power division in order to nurture the business.

Last month, Hyundai Heavy signed a contract with U.S.-based Wave Wind to provide six 1.65MW wind turbines which will be produced at its plant in Gunsan, Korea. The two companies have also agreed to expand cooperation in the 100MW capacity wind turbine project, a boost for the Korean firm which is seeking to get a bridgehead in its push into the U.S. wind power market.

Samsung Heavy aims to join the world’s top seven wind-turbine makers by 2015, expanding its capacity gradually to 800 units a year. It plans to increase ten-fold the number of employees in the wind business by then.

Daewoo Shipbuilding and Marine Engineering recently acquired a controlling stake of DeWind Turbine, a U.S.-based wind power company, for 49.8 billion won. “By combining DSME’s know-how in design and DeWind Turbine’s wind power technology, we are confident to make a fast advance in the field,” Nam Sang-tae, the company’s CEO said. The company plans to pour $700 billion into the U.S. firm for the development of new products and plans to build a new production base in the North American region.

Korean shipbuilders are shifting their business focus to wind and other green energy, as the global outlook for the shipbuilding industry appears gloomy for the next few years. The technology to make key components for wind turbines is similar to those used to make ship propellers, industry officials said.