Samsung Heavy Industries (SHI) and Daewoo Shipbuilding & Marine Engineering (DSME) - two major shipyards in South Korea - are poised to sign a deal worth $1.5 billion to build container ships for Mediterranean Shipping Company (MSC), according to the Financial Times.
The report said that this deal is the latest signal that the South Korea’s troubled shipbuilding industry is showing signs of recovery, after large losses posted by both companies in recent years because of a lack of orders.
MSC is working on an order for up to 11 container vessels, the report said. The deals will help local shipyards struggling to win more shipbuilding deals.
According to Nomura, the four major South Korean shipbuilders — Samsung Heavy, Daewoo Shipbuilding, Hyundai Heavy Industries and Hyundai Mipo Dockyard — are expected to win $16.8bn of orders this year.
South Korea is home to the world’s top three shipbuilders but the industry’s sharp downturn in recent years has eviscerated the national champions, with their yards left mired in overcapacity and saddled with mounting debts.
In order to ride out the downturn, South Korean shipbuilders have shed thousands of jobs and put some workers on unpaid leave, and have closed some idle docks.