South Korean shipping company Hyundai Merchant Marine (HMM) has embarked on ordering mega containerships.
HMM plans to order a total of 20 mega-vessels, including twelve above 20,000 TEU and eight 14,000 TEU vessels which are considered to deploy in the Asia-North Europe and US East coast trades respectively.
The long-awaited order for the 22,000 TEU newbuildings first surfaced in December last year.
“Considering the factors including the recent increase in new shipbuilding price and dock availability, HMM will start a selection of shipyards by sending out its Request for Proposal (RFP) to shipbuilding companies on April 10,” the company said.
In order to make the ships compliant with the IMO’s Sulfur Cap, HMM said it would consider fitting the ships with scrubbers or LNG-fuelled engines. The decision would be made following discussions with shipbuilders in the race to build the ships.
“If the shipbuilding process proceeds smoothly followed by the selection of the shipbuilder, signing of a Letter of Intent (LOI) and finalizing its contract, all the new vessels will be sequentially delivered in the right time to prepare for the 2020 environmental regulations,” HMM added.
The fleet investment push is aimed at boosting the shipping line’s competitiveness and it is part of South Korean government’s 5 Year Plan for Rebuilding Korean Shipping.
The plan will see the construction of about 200 ships in the next three years, including up to 140 bulkers and 60 containerships.
One of the key features of the plan is to provide financing to shipping companies which had limited access to ship investment funds, under the umbrella of a maritime powerhouse to be launched in July, named the Korea Maritime Promotion Corporation.
Aside to fleet renewal, HMM intends to set a new mid-long term plan under which its organizational capability would be boosted. The company has also set sights on digitizing its business and expanding global networks.
Since its restructuring in 2013, HMM has focused on securing financial liquidity through KRW 4 billion restructuring plan including sales of controlling stake in affiliates and other property.
The South Korean shipping company aims to double its vessel capacity by 2022 as part of its long-term plan.