Daewoo Shipbuilding & Marine Engineering Co. (DSME) President Jung Sung-leep indicated his determination to push ahead with massive restructuring of the shipbuilding company after he took office as president and CEO of DSME on May 29. Jung was approved as DSME president at an extraordinary shareholders’ meeting and a board of directors’ meeting on the same day he was inaugurated.
In an inaugural message he posted on his company’s website, DSME President Jung said, “We’ll focus on our own mainstay businesses and innovate high-cost structure.”
“We’ll concentrate energies on our mainstay businesses — commercial ship, specialty ship, and marine plant sectors — on a full blast so that our resources cannot be spread through diversifying of businesses, and the rest will be drastically disposed of,” he said.
Rumors of a plan to dispose of DeWind, a wind power unit of DSME, have circulated inside and outside the company. FLC that owns Sunning Point Country Club and the Future Leadership Center, an educational training institute, are among the candidate companies facing disposal, reports said.
President Jung said, “There are practices in which high costs are shouldered in an unconditional and unnecessary fashion, and such high-cost structure and practices will be unearthed and innovated one by one.”
Concerning the prospects of the global shipbuilding industry, Jung said the global commercial ship market is in a prolonged slump, and the global marine plant market is frozen due to low crude oil prices. “The upcoming year could be a difficult time for all of us,” the DSME CEO said, He said DSME will overcome all hardships facing the company, as it has always done, and DSME will be reborn into a worksite of life with the most competitive edge.
He urged his executives and staff members to join forces in restoring the honor the company has won and making a worthwhile journey together.
Jung entered Daewoo Shipbuilding & Industries in 1981 after graduating from Seoul National University Shipbuilding & Marine Engineering Department. He served as DSME president for four years from 2002. Jung also worked as chairman of Daewoo Information & System and CEO of STX Offshore & Shipbuilding just before returning to DSME as president.
President Jung is to participate in Nor-shipping 2015, one of the biggest maritime events in the world, in Oslo June 2 to June 5.
DSME, STX Offshore & Shipbuilding to Collaborate in Business & Procurement Areas
DSME President Jung Sung-leep and STX President Lee Byung-mo share the same view that the two companies need to join forces to overcome the difficulties the Korean shipbuilding industry is now experiencing. The move is also designed to help STX get out of financial difficulties. STX is now in an individual voluntary arrangement with its creditors.
“DSME and STX are considering ways to promote mutual cooperation, and specific options will be worked out soon,” a ranking DSME official said. “If the two companies are engaged in joint business activities and the procuring of materials, they will see their bargaining power rise, and it will be beneficial to each other.”
“If STX receives technology support from DSME armed with the world’s top class technology prowess, it will be a boom for STX to win orders on added value ships and build them,” he added.
Among ways of promoting mutual cooperation under study are joint business activities, joint procurement and DSME providing technology support. The two companies are now considering joining forces to win orders, splitting construction orders and jointly procuring equipment and materials to cut costs.
DSME President Jung served as CEO of STX Offshore & Shipbuilding just before taking the helm of DSME. Jung said in a farewell message to STX executives and staff members late last month that he was happy to move to a company that would bring benefits to STX. DSME President Jung said he would seek to establish a system to promote cooperation and have synergetic effects with STX.
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