"Hanjin's Strength Still Remains": HJ Heavy Industries Takes On 10,000-Container Ship Challenge Again

Interview with CEO Sangchul Yoo of HJ Heavy Industries
Profitability Expected to Continue for 2-3 Years; MASGA Project Is a Bonus
Naval Vessel MRO Has Been a Specialty Since the Hanjin Era

HJ Heavy Industries is embarking on the construction of a large container ship capable of carrying 10,000 containers at once for the first time in 11 years. With the added effect of the MASGA (Make American Shipbuilding Great Again) project, which is part of the United States' initiative to revive its shipbuilding industry, the company also expects high profitability.

Yoo Sangchul, CEO of HJ Heavy Industries, is speaking with the Marine Journalists Association at the HJ Heavy Industries Yeongdo Shipyard in Yeongdo-gu, Busan, on the 31st of last month. Photo by Jeon Youngju

Sangchul Yoo, CEO of HJ Heavy Industries, stated at a meeting with the Korea Marine Journalists Association at the Yeongdo Shipyard in Yeongdo-gu, Busan, on October 31, "We will sign a contract within this year with a foreign shipowner to build a 11,100 TEU container ship (1 TEU equals one 20-foot container)."

HJ Heavy Industries first secured an order for a 10,000 TEU container ship in 2014, when the company was known as Hanjin Heavy Industries. The following year, in 2015, the company also won a contract for a 20,000 TEU ultra-large vessel, which was considered a "dream ship" at the time. However, due to accumulated operating losses, the company came under joint management by creditors starting in 2016, and its Subic Shipyard in the Philippines, which was dedicated to large vessel construction, was sold off.

CEO Yoo explained, "For more than five years under the Korea Development Bank system, we could not build commercial vessels for profitability reasons, so currently, a 9,000 TEU container ship is the largest we can build." He added, "Since we stopped building container ships for a while, new shipowners were hesitant to place orders with us. However, recently, after experiencing our ships, they evaluated that 'the strength of the former Hanjin still remains,' which has been a great encouragement."

On the 31st of last month, HJ Heavy Industries Yeongdo Shipyard in Yeongdo-gu, Busan. Photo by Jeon Youngju

He also revealed plans to participate in the MASGA project, stating, "Maintenance, repair, and overhaul (MRO) is a specialty of HJ Heavy Industries." CEO Yoo said, "At the end of September, an inspection team visited for the MSRA (Master Ship Repair Agreement-a process by which the U.S. government officially certifies a shipyard's naval vessel MRO capabilities), and we expect to sign the agreement by the end of this month. From this year, we have already bid on MRO work for non-combat vessels such as oilers and ammunition ships, which can be performed without an MSRA, and the results will be announced in one or two months."

HJ Heavy Industries is a leading shipbuilder specializing in naval vessels and MRO, located so close to the Naval Operations Command that it is visible to the naked eye. During its Hanjin Heavy Industries days, the company built large transport ships such as the Dokdo and Marado, and recently, it has gained a reputation as the only domestic shipbuilder capable of producing high-speed landing craft with an average speed of 40 knots (approximately 74 km/h). On the day of the visit, both the Dokdo and the high-speed landing craft were undergoing MRO simultaneously at the Yeongdo Shipyard.

On the 31st of last month, at HJ Heavy Industries Yeongdo Shipyard in Yeongdo-gu, Busan, a 9,000 TEU methanol-powered container ship ordered by HMM is under construction. Photo by Jeon Youngjoo

CEO Yoo stated, "After 11 years of losses, we turned a profit for the first time last year. We expect to remain profitable this year as well." He added, "With the orders we have already secured, we anticipate that our profits will grow even more from next year, and that we will continue to see strong performance for the next two to three years. The MASGA project will be a bonus on top of our current results."

On this day, CEO Yoo also expressed anticipation regarding the relocation of the Ministry of Oceans and Fisheries and related agencies to Busan. He said, "We expect there will be many advantages if the government and related agencies are located nearby. In particular, the shipbuilding equipment sector, with 70% of its operations based in Busan and Gyeongnam, will benefit."

This article was supported by the Sea's Embrace Foundation and the Korea Marine Journalists Association.

This content was produced with the assistance of AI translation services.