DSME eyes LNG carriers for this year’s growth

Daewoo Shipbuilding & Marine Engineering, the world’s second-largest shipbuilder, is expected to focus on fuel-saving liquefied natural gas carriers as a way to boost its sales this year.

DSME said on Wednesday that it had signed a $100 million contract to build an LNG carrier. It has now signed five deals this year, worth about $1 billion in total. The company declined to reveal the name of its partner.

It remains to be seen whether DSME can remain strong in the market, but experts have positive expectations as the shipbuilder clinched a total of 37 LNG deals last year amid a worsening market environment.

“LNG carriers will be the profit-maker among all merchant ships. We’ll focus on LNGs as other new building orders are showing a drop,” a spokesman from DSME said in a phone interview on Wednesday.

The spokesman, however, said this year’s performance would not be as satisfying as last year’s.

DSME was a dark horse in the industry last year when it reached its target orders and secured contracts worth $14.9 billion. Finding a fresh growth engine helped DSME beat Hyundai Heavy Industries, which failed to reach its target of $25 billion and recorded $15.3 billion.

The Korean shipbuilder’s performance was noticeable, especially as 2014 was regarded as one of the worst years for shipbuilders. Experts say the plunge in oil prices and an abrupt decline in new building orders deteriorated the market conditions.

Market analysts said DSME was on the right track, as there has been a boom in shale energy development and rising demand for LNG-fueled ships due to tightened regulation on emissions.

“Daewoo’s technology in LNG carriers is being recognized globally by our clients,” DSME CEO and president Ko Jae-ho said. “We’ll continue to lead the eco-friendly shipbuilding market based on our key technologies, which are cost-efficient and environmentally friendly at the same time.”

By Suk Gee-hyun (monicasuk@heraldcorp.com)