HHI Group Makes Headway in Eco-Friendly Investments

Chairman Kwon Oh-kap of Hyundai Heavy Industries Holdings (HHIH). (Photos: HHIH)

President Chung Ki-sun of Hyundai Heavy Industries Holdings (HHIH).

Hyundai Heavy Industries (HHI) Business Group is accelerating efforts to build a hydrogen value chain ecosystem by investing more than 1 trillion won this year.

The business group specializing in mainstay businesses such as shipbuilding, refinery and construction machinery aims to reshape itself into an eco-friendly shipbuilding, maritime and energy conglomerate.

The move may be construed as the group’s bid to secure future growth engines and implement ESG management in earnest.

Business sources said HHI Business Group has raised 1,558 billion won so far this year to develop eco-friendly ships and technologies. Looking into each subsidiary, Hyundai Heavy Industries, a subsidiary of Korea Shipbuilding & Offshore Engineering (KSOE), the shipbuilding holding company of HHI Group, raised 758 billion won in investment resources, via an initial public offering, conducted in September.

The investment money will be channeled into developing green ships, digitalizing ships, building smart yards and setting up hydrogen infrastructure by 2025 on a gradual basis.

In March, HHI issued green bonds worth 300 billion won, also known as ESG bonds, designed to develop next-generation fuel technologies.

Hyundai Oilbank issued green bonds worth 400 billion won in January. The money secured through the issuance of the bonds will be used to invest in the environment improvement of facilities, such as desulfurization, and air pollutant emission reductions.

Hyundai Samho Heavy Industries (HSHI) raised 100 billion by issuing green bonds designed to build eco-friendly ships like LNG carriers in July.

Hyundai Electric and Energy Systems, a power systems and energy solution unit of the business group, is considering issuing green bonds worth 50 billion won.

The reason why major subsidiaries of the business group are scrambling to invest in the eco-friendly sector is in the context of the group’s future management.

HHI Group, recognizing the hydrogen business as a future growth engine, unveiled the ”Hydrogen Dream 2030 Roadmap,” designed to build the hydrogen value chain ecosystem, in March.

The plan is designed to secure an upper hand in the hydrogen market, emerging as a promising business, by mobilizing all subsidiaries’ capabilities to implement all businesses, ranging from production to transportation and utilization.

Hyundai Heavy Industries Holdings, or HHIH, the holding company of HHI Business Group, serves as a control tower of the hydrogen value chain business sector.

President Chung Ki-sun, who was promoted to president recently, the eldest son of Chairman Chung Mong-joon of the Board of the Asan Social Welfare Foundation, is responsible for the business.

KSOE, the holding company of Hyundai Heavy Industries and HSHI, Hyundai Oilbank, a refinery unit of the business group, and Hyundai Genuine, the holding company of Hyundai Doosan Infracore and Hyundai Construction Machinery, serve as hydrogen value chain axes.

KSOE and Hyundai Oilbank are charged with hydrogen production, transportation and storage while Hyundai Genuine and Hyundai Electric and Energy Systems as well as the former two companies are responsible for implementing new businesses using the sectors.

KSOE is trying to secure an upper hand in eco-friendly ships using hydrogen as a fuel. KSOE struck an MOU on the joint development of liquefied hydrogen fuel tanks for large-sized ships with POSCO in September.

Under the deal, the two companies agreed to implement a pilot project to build liquefied hydrogen gas tanks for small ships by the end of this year.

Both sides plan to expand the project to build hydrogen gas tanks for large-sized ships down the road.

KSOE has already launched a project to develop international standards for hydrogen ships.

A KSOE official said KSOE will advance an era of hydrogen ships by establishing international and Korean standards on hydrogen-powered carriers and hydrogen fuel propulsion ships.