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  Korea Report - November 2015
  Author : Hwang & Co     Date : 15-12-04 11:55     Hit : 28282    
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Korea Report - November, 2015.


While both HHI and SHI maintained their current management to work out the carried over troubles, other yards appointed new CEOs to tackle the massive broadscale restructuring task. DSME, STX and Daehan in May this year appointed Jung Sung-leep, Lee Byung-mo and Han Seong-hwan as their new CEOs (all from DSME). Sungdong recently appointed Kim Chul-nyun from SHI, as their new CEO. They are expected to engage in painful restructuring efforts starting this month as they struggle to cope with the present market downturn. The restructuring that will affect HHI, SHI and DSME, as well as many smaller sized companies, could result in the streamlining of operations, and the laying off of some 10,000 workers in the next two to three years. The latest market crisis can also lead to less competitive yards going bankrupt in the face of dwindling orders. Reflecting this, the government has made clear that the market needs to sort itself out with weaker companies being allowed to fail. Government stated that companies that cannot float on their own need to be ousted. Highlighting such developments, DSME already agreed to implement changes that can lead to the layoff of upwards of 30 % of its workforce in 2016. Besides Daewoo, HHI and SHI that had all engaged in restructuring last year may have to follow through with additional cost cutting measures. It seems that in the next couple of years, there will likely be a move to merge failing companies into bigger yards that can compete more effectively with overseas rivals. Through the move, Korean shipbuilding industry will form a shape as the real leader of the global industry.


TOPICS.


SKorea and Iceland agreed to strengthen cooperation on the Arctic region (p.2)


SKorea¡¯s National Assembly ratified the long-delayed FTA with China (p.2)


SKorea to reinstate history textbooks for secondary education from 2017 (p.3)


Government plans to build a second airport on the Jeju Iseland (p.5)


Two Koreas and Russia have been pushing for the ¡°Rajin-Khasan¡± project (p.7)


Moody¡¯s kept SKorea¡¯s sovereign credit rating at Aa3, citing strong fiscal conditions (p.8)


Korea's fiscal soundness is one of the most sustainable among OECD member (p.8)


Kakao Corp and KT Corp have emerged as winners for Korea¡¯s first Internet-only banks (p.10)


Hyundai companies commemorated 100th birth anniversary of founder Chung Ju-yung (p.11)


Samsung Group's governance structure simplified by a series of mergers and asset sales (p.11)


HMC launched ¡°Genesis¡± as flagship brand (p.13)


Terrorist attacks in France shook Korea¡¯s bourse and money market (p.15)


New CEOs of Korean yards are to tackle the massive broadscale restructuring task (p.15)


HHI is to forge a partnership with Aramco in the development of a maritime yard in Saudi (p.18)


Creditors agreed to inject KW4.2 tril ($3.68 bil) into DSME to help it get back on track (p.19)


SPP failed to secure RG for newbuilding order for 8 tankers (p.20)


SK E&S received final bids from Big 3 for up to 4 LNG carriers at the end of Nov (p.21)



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