HD Hyundai, which has an unrivaled presence in the world marine engine market, has further strengthened its position with the acquisition of STX Heavy Industries. This acquisition has enabled HD Hyundai to solidify its competitive advantage over Hanwha Ocean in the global marine engine market, experts say. Hanwha Ocean has also taken over HSD Heavy Industries, creating a two-runner race with HD Hyundai.
With the acquisition of STX Heavy Industries, HD Hyundai is expected to expand its product lineup to include large engines for small and medium-sized ships while securing solid competitiveness in the global ship market.
According to industry sources on Aug. 1, HD Korea Shipbuilding & Offshore Engineering (KSOE), an intermediate holding company of HD Hyundai in the shipbuilding business, signed the main agreement with Pine Tree Partners on July 31 to acquire STX Heavy Industries, becoming the company’s number one shareholder with a 35 percent stake.
The acquisition further solidifies HD Hyundai Heavy Industries’ (HD HHI’s) position as the world’s No. 1 shipbuilder. HD HHI is a subsidiary of HD KSOE, which already has a presence in the marine engine market. HD HHI’s Engine Machinery Division has been the number one market leader for 34 years, since 1989. In 2022, it held a share of 35 percent in the global market. This means that about four out of every 10 newly ordered ships are loaded with engines made by HHI.
Marine engines are a core ship component that account for 10 to 15 percent of a ship’s cost. HHI will be able to strengthen ship maintenance capabilities while sharpening its market competitiveness in terms of price.
With this advantage in mind, Hanwha Ocean immediately started to acquire HSD Engine, the world’s second-largest marine engine manufacturer, upon finalizing the acquisition of Daewoo Shipbuilding & Marine Engineering (DSME) in May. The company aims to provide total shipbuilding solutions, from ship construction to engine manufacturing, with its own production facilities and technologies. As a result, HD HHI and Hanwha Ocean have divided up the global marine engine market.
However, HD HHI has been able to maintain its dominance by taking over STX Heavy Industries, which had the third largest share. Through this, HD HHI has succeeded in diversifying its portfolio from engines for large ships to large engines for small and medium-sized ships through the acquisition of STX Heavy Industries, which excels in making large engines for small and medium-sized ships.
HD HHI is also expected to create synergies between its shipbuilding business and the engine business of STX Heavy Industries. This is because the volume of engines can determine the number of ships built. Due to a recent rush of orders for engines for ships, ship engine factories are said to be in full operation.
Source: Business Korea