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THE CREDIT CRUNCH AND SHIPBUILDING
World shipyards have a record order backlog. What effect will the global credit crunch have?

No effect
A slow down in new orders
Cancellation of some existing orders
Cancellation of many exisiting orders

Marine Log

GUNSAN SHIPYARD

April 7, 2008

New HHI yard fully booked

Hyundai Heavy Industries' (HHI) Gunsan shipyard is already fully booked for its first year of operation. The shipyard has taken orders for 12 vessels, one year's worth of work, despite the fact that the yard has not yet even held a groundbreaking ceremony. Construction of is set to start at the end of this month and construction of its first two ships will get underway simultaneously.

The 2.32 million square meter shipyard will be equipped with a one million dwt dry dock and a 1,600-ton gantry crane. Construction is scheduled to be completed in July of 2009

HHI has signed a contract to build two VLCCs at the Gunsan yard. With this order, the shipyard has 12 vessels worth a combined $1.3 billion on its orderbook. The other ten ships are large bulk carriers. HHI has also confirmed an additional contract for two further large bulkers to be delivered in 2011. A contract signing ceremony is expected at the end of this month.

The Gunsan shipyard has thus confirmed orders worth a total of $1.5 billion, 58 percent of its new-order target of 28 ships worth a combined $2.6 billion dollars.

"We are expecting to achieve our new-order target shortly based on the fact that we can deliver ships much sooner than our competitors thanks to the technology that we have," an HHI official said.

HHI would like to simplify the types of ships in the Gunsan shipyard's orderbook, taking only large bulk carriers and VLCCs as new orders in order to increase production efficiency.

The Gunsan shipyard will have 6,500 employeesand plans to deliver 12-14 ships annually, with a planned expansion to 20 ships in the near future. Its sales target is 2 trillion Won.

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