NEWS / December 30, 2008

Hyundai, revenue rose 26%
Hyundai Heavy Industries has overcome a drop in ship orders as revenue jumped by a quarter in the first 11 months of 2008. The World’s largest shipbuilder says newbuilding contracts fell by 7.4% but higher prices pushed the value of deals up. Seoul-listed HHI booked orders worth $26.20bn between January and November 2008, up 12% on the figure recorded a year ago. Revenue for the period rose 26% to $14.07bn, with November sales up 44% to $1.70bn. Hyundai had failed to book a single newbuilding in October. Only construction equipment and electronics orders kept figures ticking over as HHI's orders plunged 57% year-on-year.

Argentina record order
Trans Ona is set to place an order Monday for a handysize tanker at Argentina's Rio Santiago Shipyard (ARS).
Rio Santiago Shipyard The compatriot tanker and towage player will sign a letter of intention for the 16,000-gt unit and an option for another, according to the Buenos Aires provincial government, which owns the yard. Details of the tanker order, including the price tag, have not been released. A call to the yard went unanswered Monday. The gross tonnage would make the vessels roughly 24,000 dwt. Provincial officials, including Governor Daniel Scioli, are scheduled to attend the signing for the deal as Trans Ona takes delivery of the tug "Ona Don Lorenzo" from ARS. Buenos Aires-based Trans Ona runs a fleet of eight tugs and owns one tanker, the 35,700-dwt Ona Tridente, which ARS built in 1997. ARS, which is located in the Buenos Aires suburb of Ensenada, builds both military and merchant vessels, including bulkers, tankers, boxships and offshore supply vessels.

Minors’ crisis deteriorating in China
Although Chinese shipbuilding industry’s order cancellation has not been aggravated yet, about whether the minor private shipbuilding forces will be well-preserved after a year or two remains of concern.A large number of small private shipbuilders have been established in coastal areas in China in recent years. Media report says, up to the first half of 2008, the number of registered shipyards in Zhejiang province aggregates about 200 and they are all private shipyards. It was mentioned that the total investment in 10 shipbuilding bases by Zhejiang province on the ‘Zhejiang province shipbuilding industry distribution plan’ in December 2006 should be CNY 10.1bn. According to the local media, there are 7 shipbuilding enterprises close to the Jiangsu Jingjiang coasts, whose 2007 shipbuilding completion stood at 2.5m-dwt, nearly the half of the total completion amounts of Jiangsu province, the shipbuilding industry’s sales income went beyond CNY 30bn. According to the development plan, 4 shipbuilders’ sales income will be exceeding CNY 10bn and the total production amount in shipbuilding industry will go beyond CNY 100bn by 2012. However, small private shipyards and state-owned ineffective large state-owned shipyards are facing a very big risk due to the financial crisis. The minor shipowners and shipbuilers on vessel loans are all at great risks. It is because although the order-backlogs for the newly-rising minor private shipyard are filled until the next year or the year after, the 70% cash for the vessel the Europe shipowners were funded by a number of banks in Europe. But, due to the collapse and reconstruction of the Europe’s financial system, whether shipowners m are able to perform the contract agreement will be a doubt. If the shipowners show poor contract performance capabilities, then the down payment paid to shipyards will be insufficient either, which means the orders are likely to be withdrawn, and the market downturn will lead their not signing a new contract. When a private enterprise have no sales income or show no capability to pay back the loans, it means that they are on the brink of bankruptcy. To resolve the minor private shipbuilders difficulties, vessel mortgage loan policy is being set up currently.