Deep-Sea Plan Fails, Leaving Korean Shipyards Struggling

27 Jul 2015   South Korea

The deep-ocean strategy is coming back to bite South Korean shipyards. Hyundai Heavy Industries Co., Daewoo Shipbuilding & Marine Engineering Co. and Samsung Heavy Industries Co. — South Korea’s Big Three shipbuilders — ventured into offshore oil rigs starting around 2010. The goal was to avoid direct competition with China, where inexpensive labor could churn out low-profit tankers at cheaper rates. With oil prices climbing toward $100 a barrel, offshore rigs seemed like a savvy bet. Today the strategy seems to have backfired. Struggling with technology and a plunge in oil prices that has discouraged exploration, Korean vessel makers are racking up debt and could show billions of dollars in losses when they report earnings starting Monday. It’s the latest example of difficulties for the global […]

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