Daewoo Shipbuilding & Marine Engineering, Overcoming 2021 Volume Decline with Full Order Effort

Order Target of 7.7 Billion Dollars, Significant Decrease in Sales

[Asia Economy Reporter Hwang Yoon-joo] Daewoo Shipbuilding & Marine Engineering (DSME) is launching an all-out effort to secure orders in order to overcome temporary difficulties this year caused by a decrease in production volume.

DSME announced its management goal for 2021 to achieve $7.7 billion in orders. This target represents approximately a 37% increase compared to last year's actual performance of $5.64 billion. Sales are expected to decline significantly due to the prolonged global economic downturn caused by the novel coronavirus disease (COVID-19) and other factors.

To overcome this short-term crisis below normal operating levels, the company will carry out extreme cost-cutting activities involving all executives and employees. Through cost reduction and proactive order acquisition efforts, DSME aims to achieve its order target and do its best to secure stable future volume and operating profits.

For cost reduction, executives including President Lee Sung-geun will lead by example by expanding the scale of the existing wage return program, which has been in place since 2015, to return up to 50% of their salaries. Employees will also actively pursue reductions in labor and expenses by minimizing overtime (O/T) and using accumulated annual leave.

Additionally, except for indispensable investments, expenditures will be minimized, and the company plans to secure over 1 trillion KRW in stable operating funds this year through delivery payments for major projects and the sale of core operating assets and other holdings.

The focus of these measures to overcome the difficult situation is on achieving a stable 'order target.' In his New Year's address, President Lee emphasized 'overcoming the crisis.' At the executive forum, he expressed a strong determination for a direct breakthrough, stating, "We must achieve the order target to guarantee the future for sustainable management," and "Let's end this phase quickly by restoring our competitiveness independently without external support."