South Korea’s two major shipbuilders — Hyundai Heavy Industries Co. and Samsung Heavy Industries Co. — said Friday that they will strive to boost their profitability via increased orders and continued cost-cutting measures.
At a shareholders meeting, Park Dae-young, president of Samsung Heavy, said the shipyard will continue to work toward efficient management while implementing its self-rescue measures as scheduled.
“In order to survive, we will make efforts to secure competitiveness and boost profits,” Park said.
Hyundai Heavy Industries also said the company will work to increase its own competitiveness in the global shipbuilding sector.
The shipyard said it aims to secure sales worth 14.9 trillion won ($13.3 billion) this year.
The shipbuilding industry, once regarded as the backbone of the country’s economic growth and job creation, has been reeling from mounting losses caused by an industry-wide slump and increased costs.
The country’s top three shipyards suffered a combined operating loss of 8.5 trillion won in 2015 due largely to increased costs stemming from a delay in the construction of offshore facilities and the drawn out slump, with Daewoo Shipbuilding & Marine Engineering Co. alone posting a 5.5 trillion-won loss.
Last year, Hyundai Heavy managed to return to the black, but Daewoo Shipbuilding and Samsung Heavy continued to remain in the red.
The shipbuilders have drawn up sweeping self-rescue programs worth some 11 trillion won in a desperate bid to overcome a protracted slump and mounting losses.
On Thursday, the country’s state-run creditors of Daewoo Shipbuilding, the world’s largest by order backlog, announced a fresh rescue package worth 6.7 trillion won for the ailing shipbuilder.
The huge rescue measures, proposed by the state-run Korea Development Bank and Export-Import Bank of Korea, are the second round of bailouts for the shipbuilder that has been suffering severe liquidity problems over heavy losses from offshore projects.