HD Hyundai Sells Gunsan Shipyard to Echoprime Marine
In a significant development for the shipbuilding industry, HD Hyundai Heavy Industries has finalized the sale of its troubled Gunsan Shipyard to Echoprime Marine Pacific, a subsidiary of HJ Shipbuilding & Construction. This transaction comes after years of challenges for the shipyard, which ceased shipbuilding operations in 2017 and has since been primarily focused on producing ship structures. The sale is poised to capitalize on the recent recovery in the shipbuilding sector, driven by initiatives such as the U.S. shipbuilding reconstruction program known as “MASGA.”
Details of the Acquisition
On the 13th, Echoprime Marine Pacific announced the signing of a Memorandum of Agreement (MOA) with HD Hyundai Heavy Industries, marking a pivotal step in the transfer of the Gunsan Shipyard’s assets, including its site, dock, and production facilities. Echoprime Marine Pacific is a special purpose company (SPC) formed by Dongbu Corporation and a consortium of private equity funds to facilitate the acquisition of HJ Shipbuilding & Construction. The final sale price will be determined following due diligence and further negotiations between the parties involved.
This acquisition is expected to bolster the operations of HJ Shipbuilding & Construction, which currently operates a shipyard in Yeongdo, Busan. However, that facility has faced limitations in accommodating large-scale ship orders. In contrast, the Gunsan Shipyard, established by HD Hyundai Heavy Industries in 2010 within the Gunsan National Industrial Complex in Jeollabuk-do, covers approximately 1.8 million square meters. It features a 700-meter dock and a Goliath crane capable of lifting 1,650 tons, making it one of South Korea’s largest shipbuilding infrastructures. The facility has the capacity to produce up to 12 bulk carriers of 180,000 tons each annually, positioning it as a prime candidate for special-purpose or large-scale ship production.
Furthermore, HD Hyundai Heavy Industries has committed to supporting the Gunsan Shipyard’s normalization by ordering block production volumes for the next three years, along with providing design, procurement, and technical assistance. Given HJ Shipbuilding & Construction’s strengths in special-purpose vessels and the defense sector, there are ongoing discussions about leveraging the Gunsan Shipyard as a production base for specialized ships or as a maintenance, repair, and overhaul (MRO) hub for the U.S. Navy.
