Hyundai Heavy Industries (HHI) is trying to explore more business opportunities in the Middle East, including in countries such as Saudi Arabia. In particular, Executive Vice President Chung Ki-sun, head of HHI’s Ship and Marine Business Division, is focusing on collaboration projects with Saudi Arabia, demonstrating his ability to become the subject of public attention. The projects in which he is engaged in are long-term ones related to future growth engines, so if they yield tangible outcomes, his position within HHI Group will likely be solidified. Chung is the eldest son of HHI owner Chung Mong-joon.
HHI signed an MOU on the forging of collaboration in the “smart ship” sector with the National Shipping Company of Saudi Arabia (Bahri) at Bahri headquarters in Riyadh on May 7, according to HHI. Among those on hand at the signing ceremony were HHI Executive Vice President Chung, President and CEO An Kwang-hun of Hyundai Global Service, and Bahri CEO Ali Al-Harbi.
“Both companies have agreed to develop smart ship technologies and apply them to ships owned by Bahri,” an HHI official said.
Smart ships systems are designed to ensure the optimal operation of ships in consideration of mileage, emissions and maintenance by diagnosing issues early within a variety of equipment and components. There are about 300 ships in operation around the world that are outfitted with smart ship solutions.
The two parties’ joint development of smart ship solutions will be led by Hyundai global Service, which was spun off from HHI Group last December. The company is engaged in integrated service businesses ranging from ship systems to engines and diverse electronic parts. Bahri, established in 1978, owns a fleet of 84 ships, including 37 very large crude carriers (VLCCs), including the largest-ever VLCC in the world, 36 chemical and petroleum product carriers, and six multi-purpose ships.
The two parties have maintained an extraordinarily close relationship and overseen the delivery of 34 ships, one-third of the ships Bahri owns. Hyundai Samho Shipbuilding built 25 VLCCs for Bahri. The shipbuilder is now constructing an additional nine VLCCs for Bahri. Bahri is a significant business partner in a joint shipyard project HHI is undertaking along with Saudi Arabian Oil Company (Saudi Aramco) and Maritime Offshore Limited (Lamprell). It will cost a combined 5 trillion won. The project calls for building a shipyard covering a sprawling 4.95 million sq. meters, equivalent to 700 soccer stadiums. The project will involve not only the construction of both commercial ships and marine plants nut but also ship repair services.
HHI Executive Vice President Chung is devoting himself to making the project a success. HHI is communicating with Aramco, a biggest joint business partner via a hotline. HHI plans to establish a joint venture this year. The project calls for dedicating the shipyard and other facilities by 2021 before putting them into commercial operation the following year. In this regard, King Salman bin Abdulaziz Al Saud of Saudi Arabia, visited the joint shipyard in the Ras al-Khair area and elevated the project to a state-financed one last December.
King Salman’s involvement in the joint project is extraordinarily symbolic. Countries around the world, including the United States, the United Kingdom, Japan and Hong Kong, are scrambling to court King Salman before Aramco is listed. The reality is that Korea remains unnoticed in that matter. U.S. President Donald Trump has chosen Saudi Arabia as one of countries in which he will make his first overseas trip since his inauguration. “Hyundai Group successfully implemented the King Fahd Seaport project, which had contributed not only to the growth of the group, but also to the development of the Saudi industry,” HHI Executive Vice President Chung said. The Saudi state project is named after King Fahd, 40 years ago. Chung disclosed his willingness to make the latest project a success, saying that the group will make an example of the former project.
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