HD Hyundai Heavy Bids For Leeyoung Industrial Machinery Amid Shipbuilding Boom

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According to The Korea Economic Daily, HD Hyundai Heavy Industries has submitted a bid to acquire Leeyoung Industrial Machinery Co., a specialized domestic shipbuilding equipment maker. This signalling its preparation for the anticipated shipbuilding supercycle aims to boost Hyundai’s block production capacity, particularly in curved blocks, a key component in constructing large ships like LNG carriers.

The Role of Curved Blocks in Shipbuilding

Due to their shape, curved blocks are among the most challenging components to manufacture. Leeyoung Industrial Machinery, known for its expertise in producing these blocks, has facilities capable of producing up to 20,000 tons of “mega blocks” annually. These blocks are the construction of a ship’s bow and stern, making up 37.5% of the blocks needed for an LNG carrier.

Hyundai’s Strategic Acquisition to Enhance Production

Acquiring Leeyoung will allow HD Hyundai to increase in-house block production, reducing reliance on external suppliers, particularly from China. As demand for ships rises, Hyundai aims to secure its supply chain and meet delivery deadlines to avoid costly penalties.

Rising Industry Demand and Environmental Regulations

Korean shipbuilders are positioned to benefit from the rising global demand for new, eco-friendly vessels driven by tighter environmental regulations. With the International Maritime Organization (IMO) mandating significant reductions in ship emissions by 2050, orders for advanced, environmentally compliant vessels are expected to surge.

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Source: The Korea Economic Daily