대한조선주식회사

[March 14, 2019] Daehan Shipbuilding Co, World No. 1 110,000-ton Tanker Maker, is Seem to Revival

A 100-meter-high Goliath crane (1500 tons) stands in the middle of the workplace which has a width of a four-foot soccer field in Haenam-gun, Jeolla-Nam-Do, around 7 a.m. on May 4. Cranes lifted hundreds of tons of ship blocks which were cut and put together by shipyard workers.

As they approached the drying area, they heard the noise of grinding iron plates and the alarm sound of large cranes moving. Workers are polishing iron on a 20-meter-high steel wall piled up on a supporting platform. The smell of iron spread out.

Daehan Shipbuilding Co, a medium-sized shipyard, is seen to be a revival. In 2017 and last year, they won orders successfully for 14 ships and 15 ships, respectively. So, Daehan Shipbuilding Co was expected that change from deficit to surplus this year. Park Young-Deok, CEO of Daehan Shipbuilding Co, said, "Three years ago, I sighed about how to fill the yard," adding, "We have received orders until the first half of next year.“

◇ Daehan Shipbuilding Co have increased proficiency and productivity by only making 110,000-ton tankers

The 250-meter-long and 30-meter-high Aframax crude oil carrier HN5020 appeared near the dock on the leftmost side of the drying area. The ship, which has been scheduled to be delivered to the Greek shipowner, had been painted and had only two days left before the launching ceremony.

On that day, a pork belly party is held in the cooking room of the HN5020. This is to commemorate the achievement of a process rate (82.7 percent) that can supply electricity to the launching front. Employees of Daehan Shipbuilding Co turned on the ship's heaters and grilled pork belly. Park Young-Deok, CEO of the company, said, "It was great that achievement to supply electricity to the galley before the launching ceremony," adding, "To increase the process rate by 0.1 percent, you should put blood, sweat into a job.“

Daehan Shipbuilding Co was used to build bulk ships, but recently it is focusing on building 110,000 tons (Aframax) tankers. As a result of continuous build one type of ship, the quality and productivity of employees have improved. From 2015 to last year, Daehan Shipbuilding Co ranked first in the Aframax oil carrier market. Samsung Heavy Industries, which ranked second with a 42 percent market share last year.

Daewoo Shipbuilding &Marine Engineering co-owns 23.4 percent of Daehan Shipbuilding Co, which was established in 2007. In the shipbuilding recession since 2009, Daehan Shipbuilding Co has experienced workouts and court receivership. He graduated from court receivership at the end of 2015 after overcoming the pain of voluntary retirement and unpaid leave. However, in 2016, orders for only two ships were received.

Daehan Shipbuilding Co is restructuring to overcome the crisis. Of all employees, 20 percent (about 100) of the non-production workers will be forced to retire voluntarily and pay back part of their annual salaries. Last year, fixed costs such as labor costs decreased by about 18 percent from 2016. Daehan Shipbuilding Co labor union and employees of Daehan Shipbuilding Co chose sacrifice rather than struggle in restructuring the company.

Na Hyung-Sik, assistant manager of Daehan Shipbuilding Co, said, "I felt that the company was in danger of closing down twice and that everyone could survive if the company survived. I felt a great sense of crisis that if the company went bankrupt, the regional economy would be in trouble, so I joined in sharing the pain.“

◇ Positive effects on the regional economy: "independence" by selling Daewoo Shipbuilding

The recent revival of Daehan Shipbuilding Co has also had a positive impact on the regional economy. According to the Bank of Korea's Mokpo headquarters, shipbuilders in Daebul Industrial Complex in Jeolla-Nam-do produced 286.6 billion won in December last year, up 21 percent from December 2017. The number of permanent (excluding contracting and dispatching) manufacturers and shipbuilders in the Daebul Industrial Complex was 16,400, up 17.3 percent from 14,000 in December 2017

However, there are variables in their future. Daewoo Shipbuilding &Marine Corporation, his brother's company, will be sold to Hyundai Heavy Industries, but Daehan Shipbuilding Co is forced to stand on its own feet due to their exclusion of the contract.

Park Young-Deok, CEO of the company, said, "We received orders for two 60 to 70 billion won oil carriers in the first quarters of this year," adding, "We are also trying to win orders for Suez Max (13 to 150,000 tons) oil carriers based on the confidence gained from Aframax."