Hyundai Glovis, a shipping arm of Hyundai Motor Group, signed a shipping contract worth $500 million on Oct. 5 with the Qatar Primary Materials Co.
It is considered the largest non-oil shipping agreement that the company has ever signed, the shipping company said recently.
QPMC is the company set up in 2006 by the Qatar government to take charge of importing the materials to build infrastructure, such as football stadiums for the 2022 World Cup Finals. The materials that the company is to import include stones and other construction materials.
The shipping agreement calls for Hyundai Glovis to take charge of shipping the materials weighing some 50 million tons from harbors in the UAE and Oman to Mesaid Harbor, the exclusive harbor for Hyundai Glovis ships, in southern Qatar.
The Korean shipping firm plans to deploy some 20 of its bulk carriers to transport the construction materials under the agreement. The shipping firm expects no difficulties as it already completed a shipping contract with the QPMC in January worth $100 million, and the successive contract is likely to help the Korean shipping firm to win similar contracts in the region, shipping industry sources said.
Hyundai Glovis would like to accumulate experience in shipping aggregate to win more shipping contracts in the region. Dubai’s holding the World Expo in 2020 is expected to keep the region’s construction firms busy.
The shipping firm opened its office in Dubai to strengthen its activities in the region.
President Kim Kyung-bae said the logistics business has been growing rapidly in the region and the company will try to win more shipping contracts through its Dubai office.
Hyundai Glovis Co., Ltd. is a logistics company headquartered in Seoul, Korea and part of the Hyundai Kia Automotive Group. Its predecessor company, Hankook Logitech Co. Ltd., was formed in February 2001. Hyundai Glovis supplies ocean transportation logistics advice, cargo space, loading/unloading, and packaging services.
It changed its name to Hyundai Glovis in June 2003. Hyundai Glovis provides ocean transportation, air transportation, inland transportation, logistics consulting, storage, packaging services as well as supply chain management services.
Since 2011, the company has launched auto parts recycling business, named "OnECO," and it mainly consists of distribution of reuse and remanufactured auto parts.
The chairman of Hyundai Motor Co. and his heir-apparent are resuming a botched stake sale in the car group’s logistics arm, in a deal valued at up to $1.1 billion and widely seen as paving the way for a smooth succession at the family-owned conglomerate.
Chairman Chung Mong-Koo and his eldest son Chung Eui-sun are looking to sell 5.02 million shares in Hyundai Glovis Co., after calling off the sale last month as investors balked at both the size and pricing of the offering.
In their latest attempt, they are selling the shares at 227,520 won to 232,260 won apiece, below the prices set last month, while leaving the deal size unchanged. The latest price is also 2 percent to 4 percent below its closing price. In their previous attempt, they had planned to sell the shares in a block trade at 264,000 won to 277,500 won apiece.
The sale is being seen as an effort to raise the money needed for the junior Chung to gain control of the management of the group, which owns Hyundai Motor and Kia Motors Corp., the country’s largest and second-largest auto makers, respectively.
“The family is keen to sell its stake in Hyundai Glovis so that Chung Eui-sun can secure cash to raise his stake in Hyundai Mobis Co., which is at the heart of the group’s ownership structure,” said Park Ju-geun, chief executive of CEO Score, a Seoul-based research firm that tracks the country’s biggest conglomerates.
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