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DSME bags five VLCCs from Hyundai MM
Total contract value for $420m level plus option for five units
Tuesday, September 05, 2017, 10:07:46 Paul Yoon
DSME (Daewoo Shipbuilding & Marine Engineering) has won a newbuilding order for five VLCCs, signaling an early normalization of its management.

DSME announced on Sept. 4 that it has received a newbuilding order with a total contract value of $420m for five 300,000dwt class VLCCs from Hyundai MM (Hyundai), the largest domestic shipowner in Korea. The delivery of the vessels will start from the first half of 2019 in series.

The newbuilding contracts for 5 VLCCs have been sealed in five months from an LOI (Letter of Intent) signed last April for construction of 5 VLCCs with an option for 5 extra units. DSME is expected to win an extra order for five more VLCCs if the option is declared.

Each of five VLCCs ordered measures 336m in length and 60m in width as an eco-friendly ship of next generation complying with IMO’s environmental restriction criteria, installed with engines of high efficiency as well as applied with DSME’s state-of-the-art technologies including updated fuel-saving technology. The vessels are set to be built at Okpo Shipyard of DSME based in Geoje Island, Korea for delivery to be all completed by 2019.

Hyundai had ordered five units of very large containerships (VLCS) at DSME in 2011, the largest containerships which it is now operating. The shipping line had also chartered-in six VLCS of 10,000teu class each from Zodiac which had ordered at DSME in 2013. Thus Hyundai has maintained long-reliable relation with DSME.

DSME has lately bagged four VLCCs from Maran Tankers based in Greece, and has also sealed a contract for supply of submarine equipment. This means that the shipyard has successfully received continuous newbuilding orders on the back of customers’ solid confidence in the builder with its business performance greatly improved for the 1st half of this year, signaling the green light for the early normalization of its operation.

Sung Leep Jung, CEO and President of DSME, said: “Domestic and overseas customers have shown their unlimited trust in DSME’s building capacity and its building technologies. We will build and deliver top-quality ships to them in return for their trust in us.”

DSME have received newbuilding orders this year to date for 2 LNG carriers, 14 VLCCs and 2 specialized ships totaling 18 ships with a total contract value of $1.75 billion, exceeding last year’s total order figures of 11 ships valued for $1.55b.

Meantime, Hyundai will secure finance for five VLCCs ordered at DSME under the government’s Newbuilding Program. Hyundai said that it has ordered the VLCCs in a preemptive move to cope with market changes, considering that it is the best timing now to order them at the lowest price level since 2003.

CEO and President C. K. You of Hyundai said: “Under the newbuilding deal concluded with DSME this time, it is expected that Korea’s shipping players and shipbuilders can build a virtuous cycle of win-win growth. Taking this opportunity, we wish to convey our heart-felt appreciation to related financial officials of KDB, Korea Eximbank and K-sure for their all-out efforts paid to our newbuilding project. We will do best to make Hyundai grow into one of the world’s top class shipping lines as most competitive, meeting Korean people’s expectations.”
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