SHI orders pass $15 billion

Orders received by Samsung Heavy Industries exceed $15 billion, a first in the shipbuilding industry, the company says.

Offshore staff

NINGBO, China -- Orders received by Samsung Heavy Industries exceed $15 billion, a first in the shipbuilding industry, the company says. The milestone was achieved with recent orders from Europe worth KRW 1.2 trillion ($1.3 billion), including one FPSO, and five container. SHI says that with these new orders, it has surpassed its target for the year.

The $400-million construction order for the FPSO will be paid 100% in Korean currency. SHI had signed a contract to receive 58% of a vessel price in Korean currency in February, with the remainder to be paid in Euros in August. This agreement for payment entirely in Korean currency is the first in the history of the Korean shipbuilding industry, SHI says.

If the practice of settlement in Korean currency spreads throughout the shipbuilding industry, it is expected to contribute considerably to stability in the foreign exchange market, not only by preventing foreign exchange risk, but also by lessening the impact on the foreign currency market stemming from the necessity for large-scale forward exchange every time companies receive orders for vessels, SHI says.

As of Sept. 6, SHI had received orders for 86 vessels worth $15.2 billion. SHI already has secured orders for the next three years, with back orders worth $38 billion, the highest level in the industry, the company says.

"SHI will continue to sign contracts with the condition of payment in Korean currency for future orders as well," says CEO Kim Jing-wan. "By setting this example, we hope to enable other Korean shipbuilding companies that are leading the global shipbuilding market to sign contracts in a more favorable conditions. The company will strive to improve its quality to solidify its position as a world-class shipbuilding company."

9/10/2007

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