EcoPrime Marine Pacific, the major shareholder of HJ Heavy Industries, is set to acquire HD Hyundai Heavy Industries’ Gunsan Shipyard.
On March 13, Eco Prime Marine Pacific and HD Hyundai Heavy Industries announced that they had signed a Memorandum of Understanding (MOU) regarding the transfer of assets at the Gunsan Shipyard at Eco Prime Marine Pacific’s headquarters in Yongsan-gu, Seoul. The transfer price will be finalized following due diligence and valuation; South Korean media reports estimate it to be between 700 billion and 1 trillion won (approximately $466 million to $666 million).
The Gunsan Shipyard was completed in 2010 with an investment of 1.2 trillion won from HD Hyundai Heavy Industries. Covering an area of 1.8 million square meters, the facility featured the world’s largest 1-million-ton dry dock (700 meters long) and a 1,650-ton gantry crane at the time, enabling the simultaneous construction of four large vessels. The Gunsan Shipyard was one of the largest single-site shipyards in the world at the time.
In its early years, Gunsan Shipyard achieved annual sales of 1 trillion won and was regarded as a symbol of the Korean shipbuilding industry’s prosperity. However, this boom was short-lived; due to the ongoing slump in the global shipbuilding market, orders for bulk carriers and container ships—the yard’s main products—declined sharply, and it was ultimately forced to suspend operations in 2017.
In October 2022, as the shipbuilding industry gradually recovered, Gunsan Shipyard resumed operations, primarily undertaking outsourced construction of ship hull sections. It currently has an annual production capacity of approximately 100,000 metric tons and employs 1,000 people.
A representative from HD Hyundai Heavy Industries stated, “Through this asset transfer, we expect the Gunsan Shipyard to be able to undertake full-scale shipbuilding in the future. Furthermore, following the transfer, HD Hyundai Heavy Industries will continue to award subcontracts for section construction at a volume comparable to current levels, creating a mutually beneficial arrangement for HD Hyundai Heavy Industries, Eco Prime Marine Pacific, and the city of Gunsan.”
Eco Prime Marine Pacific announced plans to jointly operate the Gunsan Shipyard with HJ Heavy Industries to create a world-class shipbuilding group.
Industry analysts in South Korea believe that if this acquisition is successfully completed, the strategic value of the Gunsan Shipyard is expected to increase significantly. Although HJ Heavy Industries operates two dry docks at its Yeongdo Shipyard in Busan, the maximum length of these docks is only 300 meters, posing significant limitations in the construction of ultra-large vessels; furthermore, with a site area of approximately 260,000 square meters—equivalent to only one-seventh of Gunsan Shipyard’s—its capacity for expansion is limited.
In contrast, Gunsan Shipyard’s existing facilities are capable of building high-value-added vessels such as Very Large Crude Carriers (VLCCs), ultra-large container ships of 20,000 TEU or more, and liquefied natural gas (LNG) carriers, giving it a natural advantage in the field of large-scale shipbuilding.
The South Korean shipbuilding industry notes that the shipyards of the country’s three major shipbuilders are currently operating at near full capacity. Against this backdrop, the Gunsan Shipyard, which has resumed operations, is highly likely to secure “spillover orders” for large vessels, thereby further expanding its production capacity and enhancing its standing in the industry.
HD Hyundai Heavy Industries also plans to collaborate with Gunsan Shipyard for a certain period to help ensure its stable operations. The two parties have agreed that, for three years following the completion of the acquisition, HD Hyundai Heavy Industries will continue to place orders with Gunsan Shipyard for the outsourcing of ship hull sections and will provide supporting services such as design services, procurement of raw materials, and technical support for shipbuilding automation.
The potential for the Gunsan Shipyard to serve as a maintenance, repair, and overhaul (MRO) base for the U.S. Navy has also drawn widespread attention within the industry. HJ Heavy Industries is the only medium-sized shipyard in South Korea currently contracted to perform MRO work on U.S. Navy logistics support vessels, and the company is expected to leverage the Gunsan Shipyard’s site and facility advantages to further expand its business with the U.S. Navy.
As the global shipbuilding industry enters another boom cycle, expectations within the South Korean industry for the Gunsan Shipyard are rising, with widespread interest in whether it can fully leverage its site and facility advantages to resume full-scale shipbuilding operations and regain its former standing in the industry.