Hyundai Heavy Industries Group said it is going to restructure its business portfolios with a focus on solidifying the competitiveness of its core businesses in order to bring the company back to profitability. Hyundai Heavy Industries has entered an “emergency business mode” with the inauguration of an emergency management committee, headed by Hyundai Heavy Industries Chairman Choi Kil-sun and the top management’s decision to return their pay. The group plans to reinforce an “independence management” system with respective CEOs taking their own management responsibilities.
In his New Year’s message, Hyundai Heavy Industries President Kwon Oh-kap, said, “All hardships and risk factors cannot be overcome by us on our own. It is out of the question, with the current environment and way, but our mindset and behavior should be changed, so we must start from scratch.”
Entering 2016, Hyundai Heavy Industries President Kwon has on his shoulders a heavy mission to turn around the nation’s biggest shipbuilding company. President Kwon, 15 months in office, has reaffirmed his resolute determination to return the company to profitability, urging his executives and staff members to start from scratch and take on new challenges.
HHI is at a crossroads whether the company will turn around losses. The company chalked up a 3.249 trillion won operating loss in 2014. The company continued posting an operating loss through the first nine months of 2015. The aggregate operating loss for the seventh consecutive quarter swelled to some 4.5 trillion won. The sagging shipbuilding business was attributable to the crude price plunge and delays in awarding marine plant and ship orders.
HHI President Kwon was appointed as a “relief pitcher” with a mission to normalize the loss-taking shipbuilder in September 2014.
HHI is accelerating efforts to secure a competitive edge by developing eco-friendly ships and “smart ships” and localizing marine plants. Since the shipbuilding division has enough of a backlog of orders, it plans to nimbly cope with market changes based on its capacity to build a variety of ships. The division attaches top priority on profit-taking strategies.
The marine plant division is trying to address unit price hikes and delayed processes. It is stepping on the gas to localize materials and equipment imports to ramp up its competitiveness. It also plans to accelerate efforts to make materials and design in conformity to international standards.
HHI’s strategy is to win projects confirmed to make a profit, after taking an in-depth look into such factors as process planning and unit price.
HHI disposed of is stakes in Hyundai Corp. and Hyundai C&F, to Hyundai C&F and Hyundai Corp. Chairman Chung Mong-huck, respectively, last December. Earlier, HHI transferred control of Hyundai Resources Development to Hyundai Corp. Last May, HHI began to restructure its three financial subsidiaries, including Hyundai Finance Corp.
It is designed to concentrate its energies and core capacities to build more sustainable core businesses, HHI officials said.
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HHI executives and staff members raise their hands to pledge to ensure safety at a ceremony to kick off the 2016 business year and ensure safety.(Photos:HHI)
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