Tuesday, April 4, 2017

Shipbuilder to Spend Billions on Research and New Facilities

Green Vessels and Smart Shipyards on the Agenda
Shipping News Feature
SOUTH KOREA – As Hyundai Heavy Industries (HHI) splits into 4 independent companies, the group has announced plans to invest a total of US$3.1 billion in research and development over the next five years aimed at advancing the core shipbuilding business. The investment marks a big step for HHI, as it begins to look to the future of an industry in which it has struggled for many years.

Under the plan, the new HHI will invest $1.8 billion in developing eco-friendly and smart ships, enhancing offshore engineering capability, and establishing smart ship yard. The three new businesses; Hyundai Electric & Energy Systems (HEES), Hyundai Construction Equipment (HCE), and Hyundai Robotics (HR), will also make an investment of $640 million, $620 million and $90 million for technological innovation respectively. In the longer-term, HHI Group plans to spend 6-7% as a percentage of annual sales in R&D.

For quality enhancement of its products and services, HHI will set up lessons-learned database by accumulating engineering failure cases while HEES, HCE, and HR will further accelerate technology development drives to secure competitive product line-up. Moreover, the four companies will appoint Chief Technology Officers in charge of driving product development, drafting technology strategy, and nurturing human resources, and expand numbers of researchers to 10,000 from current 4,000.

The HHI Group also introduces new HR management system that simplifies current 5-tier ranking system to 3-tier one to build up horizontal and creative organisation culture and to liven up communications among employees. The companies also introduce performance-based pay system marking the departure from current seniority-based one. At a tree planting ceremony at HHI’s Ulsan shipyard to commemorate HHI Group’s rebirth, Vice Chairman and CEO of HHI Kwon Oh-gap, said:

“As today marks new chapter in our history, the three newly established companies will make utmost efforts to rank the global top 5 in their respective fields by making quality and technology top priorities.”