HJ Heavy Industries Starts Operation of Ship Block Factory in Geoje... Expanding Production Capacity

Expectations for Production Stabilization and Sales Expansion

HJ Heavy Industries Geoje Plant Panorama

[Asia Economy Reporter Oh Hyung-gil] HJ Heavy Industries announced on the 30th that it has resumed its merchant ship business by operating a satellite factory to produce ship blocks.

HJ Heavy Industries has secured orders for a total of 8 container ships worth approximately 660 billion KRW this year, including 4 container ships ordered so far. Last year, the company succeeded in re-entering the merchant ship market, which had been halted since 2016, by securing orders for 4 container ships.

However, as orders increased, the main business site, Yeongdo Shipyard, became overloaded. The shipyard requires a large yard to produce and store blocks, which are ship components, but the 80,000㎡ Yeongdo Shipyard site lacked sufficient space to handle not only the warships and special-purpose vessels under construction but also the blocks needed for merchant shipbuilding.

HJ Heavy Industries’ satellite factories in Busan Dadaepo and Incheon Yuldo, which had been operated previously, were sold off in 2017 following the creditors' financial restructuring plan and no longer exist.

Accordingly, the company has been carefully reviewing candidate sites for a satellite factory within the Busan and surrounding areas, but most candidates were shipping or port sites or used as tourist destinations, leading the company to turn its attention to the Geoje area.

HJ Heavy Industries secured a site for a Geoje factory within the general industrial complex in Yeoncho-myeon, Geoje City. Since this site was previously used for manufacturing and supplying ship blocks, it allowed the company to secure essential facilities for ship block production?such as assembly and painting factories, auxiliary facilities, cranes, and power substation equipment?at minimal cost.

An HJ Heavy Industries official stated, "Since resuming merchant ship orders last year, the need for a satellite factory to stably supply production volume has been steadily raised. The Geoje factory will serve as a catalyst for expanding sales in the shipbuilding sector, one of our two major business groups, and is expected to play a role in the company’s normalization and leap forward in the future."