Hyundai and Daewoo get $1.54b Oman order

Seoul: Hyundai Heavy Industries Co, the world's largest shipbuilder, and Daewoo Shipbuilding & Marine Engineering C. received orders from Oman Shipping Co to build 10 oil tankers for a combined $1.54 billion.

The two shipyards will each build five 318,000 tonne double-hulled tankers to be delivered by April 2012, Hyundai Heavy and Daewoo Shipbuilding said in separate regulatory filings yesterday.

Shipyards in South Korea, the world's biggest shipbuilding nation, are winning orders at higher prices this year, easing concerns that a possible US economic recession may slow contracts for new vessels. The builders won record orders for a sixth year in 2007.

"Investors have overreacted to these concerns," said Song Jae Hak, an analyst at Woori Investment & Securities Co in Seoul.

"While it'll be hard to exceed last year's record figures, it'll still be a good year for orders in 2008." Song has an "overweight'' rating for the shipbuilding industry.

Hyundai Heavy gained 2.4 per cent to close at 341,500 won in Seoul. Daewoo Shipbuilding, the world's third-largest shipyard, advanced 1.5 per cent to 34,950 won.

Hyundai Heavy, Daewoo Shipbuilding and other South Korean shipyards are adding new docks, extending the length of existing ones, and increasing production of parts as they work through orders with deliveries that stretch into 2012.

Daewoo Shipbuilding has received $1.27 billion in orders this year. Hyundai Heavy, along with its unlisted Hyundai Samho Heavy Industries Co. unit, won $1.2 billion in January.

Hyundai Heavy is building two new large dry-docks in South Korea and constructing a factory to build blocks, structures for the hull of vessels, to meet demand. It had orders for 333 vessels valued at $35.1 billion at the end of December.

The company plans to deliver 101 vessels this year, 25 per cent more than in 2007, posting record profits and sales for a third year. The deliveries may help the company to meet its target of a 16 per cent gain in sales to a record 18.06 trillion won ($19 billion).