The intense rivalry between HD Korea Shipbuilding & Offshore Engineering (HDKSOE) and Hanwha Ocean has now spilled over into ship engine manufacturing capabilities, as evidenced by the HD Hyundai Group affiliate’s recent acquisition of STX Heavy Industries, only months after the Hanwha affiliate acquired HSD Engine, according to market watchers.
STX Heavy Industries is the third-largest ship engine manufacturer in the world, trailing HSD Engine, the second-largest.
The Hyundai affiliate signed a main contract with Pinetree Partners, a local private equity fund, to buy over 6.5 million shares of STX Heavy Industries on July 31.
The purchase combined with the separate buying of 5.36 million shares issued by a third party will lead to the Hyundai affiliate claiming a total stake of 35 percent.
A ship engine manufactured by STX Heavy Industries / Korea Times file
A ship engine manufactured by HSD Engine at the firm’s headquarters in Changwon, South Gyeongsang Province / Korea Times file
The 81.3 billion won ($63.4 million) acquisition will propel the mid- to long-term growth of the Hyundai affiliate.
STX Heavy Industries’ cumulative engine production total exceeded 15 million horsepower and the number of engines manufactured topped 1,000 units in 2011.
STX was the fastest-growing player in the global engine market at the time. Also notable was its first localization of the 51/60 dual fuel (DF) engine that can be mounted on liquefied natural gas (LNG) carriers.
STX Heavy’s prospects will remain robust, as evidenced by the firm having inked five deals to supply ship engines this year. Among the buyers are a China-based shipbuilder and two local shipbuilders.
The firm has won an order total of 142.6 billion won this year, about 79.5 percent of last year’s sales.
Hanwha Group in June acquired HSD Engine about four months after the group’s affiliate Hanwha Impact signed an agreement to acquire a 33 percent stake in HSD Engine in February for 226.9 billion won.
Chief among HSD Engine’s key products are high-value green ship engines, including methanol DF engines.
“We will be able to spur growth in the global high-value, green shipbuilding market through the synergy effects from the acquisition,” a Hanwha Ocean official said.
“Our engine and engine parts manufacturing capabilities will be significantly bolstered, including that for turbochargers. Our sales in the Chinese market will increase as well,” an HDKSOE official said.
“Our efforts to strengthen production output capacities for key engine parts will help us better meet the growing demands for green high-value engines in the years to come.”
Source: The Korea Times