Hyundai Heavy jumps most in seven weeks

The Pak Banker - - Company& -

SEOUL: Hyundai Heavy In­dus­tries Co., the world's largest ship­builder, jumped the most in seven weeks in Seoul trad­ing af­ter Ha­pag-Lloyd AG in­creased a con­tainer-ship or­der by about $754 mil­lion, Bloomberg re­ported..

The ship­ping line ex­panded the ca­pac­ity of six on-or­der ships to 13,200 boxes and or­dered four ad­di­tional ves­sels of the same size, it said in a state­ment on its web­site yes­ter­day. The move boosted the or­der value to $1.45 bil­lion from 793.9 bil­lion won ($696 mil­lion), Hyundai Heavy said to­day.

STX Off­shore & Ship­build­ing Co. also rose af­ter the com­pany and an af­fil­i­ate won a $912 mil­lion ship or­der from an­other STX Group com­pany.

De­mand for new ves­sels has re­bounded this year as trade re­cov­ers from the global re­ces­sion and as ship­ping lines pre­pare for the com­ple­tion of work to widen the Panama Canal.

"The or­der news helped lift shares of ship­builders to­day," said Song Jae Hak, a Seoul-based an­a­lyst at Woori In­vest­ment & Se­cu­ri­ties Co.

"The re­cent rise in ves­sel or­ders and prices, as well as in­creas­ing or­ders in non-tra­di­tional ship­yard ar­eas like power plants, have bright­ened the out­look for ship­builders next year."

Hyundai Heavy, based in Ul­san, South Korea, rose 6 per­cent to 406,000 won as of 12:27 p.m. That's the biggest in­tra­day gain since Oct. 25. The bench­mark Kospi in­dex rose 0.3 per­cent.

STX Off­shore jumped as much as 9.4 per­cent, the most since Nov. 17, to 23,800 won. The com­pany and its Dalian, China ship­yard will build 20 ves­sels to carry wood pulp for STX Pan Ocean Co., the ship­builder said in an e-mailed state­ment to­day.

Dae­woo Ship­build­ing & Ma­rine En­gi­neer­ing Co., the world's sec­ond-biggest ship­yard, rose 3.9 per­cent to 31,950 won.

Ha­pag-Lloyd will use its 10 ves­sels, due for de­liv­ery from mid-2012 to the end of 2013, on Far East routes, it said in its state­ment.

Work to widen the Panama Canal, which will al­low larger ves­sels to use the wa­ter­way, is due to be com­pleted in 2014.

In a sep­a­rate news item, Nis­san Mo­tor Co. and Mit­subishi Mo­tors Corp. will set up a 50-50 joint com­pany next year to de­velop mini­cars for Ja­pan to help boost sales, ex­pand­ing an al­liance un­der which the com­pa­nies sup­ply ve­hi­cles to each other.

The two au­tomak­ers will cre­ate a new minicar to be sold in 2012, while Nis­san will sup­ply a light van and wagon to Mit­subishi in Ja­pan. Mit­subishi will sell a sportu­til­ity ve­hi­cle to Nis­san in the Mid­dle East, the au­tomak­ers said to­day in a joint state­ment.

"This agree­ment is im­por­tant for Nis­san as it sup­ports our ex­pan­sion in emerg­ing mar­kets, meets im­me­di­ate ca­pac­ity needs over­seas, and en­ables us to grow our minicar busi­ness in Ja­pan," Nis­san Chief Ex­ec­u­tive Of­fi­cer Car­los Ghosn said in a state­ment.

The part­ner­ship gives the man­u­fac­tur­ers greater economies of scale while al­low­ing them to en­ter mar­ket seg­ments with min­i­mal in­vest­ment. The two car­mak­ers al­ready co­op­er­ate by sup­ply­ing mini­cars, with en­gines no larger than 660cc, and com­mer­cial ve­hi­cles.

Nis­san cur­rently pro­duces the Lancer Cargo com­mer­cial ve­hi­cle for Mit­subishi, which in turn builds the Mini­cab, Town Box, eKWagon and Pa­jero Mini mod­els for the larger car­maker.

Mit­subishi Mo­tors plans to build Nis­san's Navara pickup truck at its fac­tory in Thai­land and the au­tomak­ers are eval­u­at­ing a plan to col­lab­o­rate on man­u­fac­tur­ing and en­gi­neer­ing for a new one-ton pickup, they said to­day.

Nis­san shares gained 0.3 per­cent to 809 yen at the 3 p.m. close of Tokyo trad­ing. Mit­subishi Mo­tors surged 8.5 per­cent to 128 yen, the biggest gain since Dec. 3, 2009. The press state­ment was re­leased af­ter the mar­kets closed in Ja­pan.

More­over, Hyundai Heavy In­dus­tries, Korea's lead­ing ship­builder, has re­ported a cou­ple days ago that a record amount of over­seas volt­age trans­former or­ders with 1.4 tril­lion won ($1.2 bil­lion) so far this year.

The com­pany said that with 200 bil­lion won in or­ders in Novem­ber alone, the to­tal amount marked a 30 per­cent in­crease from a year ear­lier as it be­came the first Korean com­pany to ex­ceed $1 bil­lion in an­nual or­ders.

The com­pany's most re­cent or­ders came from the United King­dom, where it signed a deal worth 130 bil­lion won to sup­ply equip­ment for U.K.-based Na­tional Grid, which will in­clude the de­liv­ery of 400 kilo­volt ca­pac­ity trans­form­ers be­tween 2012 and 2016.

Hyundai is also hop­ing to win or­ders for 40 trans­form­ers that would be supplied to Na­tional Grid's U.S. di­vi­sion in Bos­ton, and ex­pects or­ders to ex­ceed 1.5 tril­lion won this year, which is a five-fold in­crease from 2006.

For the In­dian mar­ket, which the com­pany en­tered for the first time this year, Hyundai has won or­ders to sup­ply more than 100 ex­tra high-volt­age trans­form­ers with 765 kilo­volt ca­pac­ity. The com­pany is ex­pect­ing more or­ders from In­dia.

"Our or­ders are in­creas­ing ev­ery year be­cause we have op­er­ated for more than 30 years in the over­seas trans­former mar­ket in North Amer­ica, Europe and the Mid­dle East, which has made us known for good qual­ity and ser­vice," said a Hyundai Heavy of­fi­cial.

"When our Alabama fa­cil­ity is fin­ished in 2012, our global trans­former pro­duc­tion lines in Korea, the United States and Bul­garia will al­low us to en­ter the global top three."

Since en­ter­ing the busi­ness in 1978, Hyundai has ex­ported its trans­form­ers to 70 coun­tries. Com­pany of­fi­cials added that the com­pany cur­rently ranks within the global top five in terms of large-ca­pac­ity trans­form­ers. -PB News

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