HMM plots Doubling of Fleet Capacity

Korea's Hyundai Merchant Marine (HMM) is planning to double its capacity by 2022 as it plots its "resurgence".

News ID: 78035

Date: 09 January 2018 - 09:21

According to MANA, CEO Yoo Chang-keun told staff in his new year message: "We have gone through a long tunnel, and see the light of hope at last."
Bouncing back from its restructuring in 2016, the company is now considering ways to increase the fleet size, "including the launching of mega-containerships as we deem the environmental regulations in 2020 as a golden opportunity for our resurgence," Yoo said.
HMM was linked to orders for between 12 and 14 ships of up to 22,000 teu last year, but any deals are believed to be dependent on funds from state-backed Korea Maritime Corp (KMC), which is being formed in July to combine three existing funds.
KMC will have capital of KRW 5bn ($4.7bn), with domestic owners likely to try to tap into it for financing.
Alphaliner ranks HMM as thirteenth in the global liner list in terms of capacity, with 347,000 teu via 62 ships. A doubling in this sector would lift it to seventh, in line with its ambition to be a top 10 player.
The owner reached 4m teu in terms of cargo volumes in 2017, up from 3m teu in 2016, "as we successfully regained support from customers through our strenuous efforts to rebuild our credibility," Yoo said.
"In the container sector, we need to design competitive products in newly added services in the East-West lane and offer a variety of differentiated products to the market, combined with expanded coverage in Asia through the cooperation with K2," Yoo said.
"We should also seek to double the efforts for sales promotion for the upgraded service with the implementation of proper pricing and marketing tactics."
In the tanker sector, the VLCC order is seen as "a precious momentum pivot for strengthening long-term business partnerships with prime customers over 2020."
"Also, the dry bulk sector should revamp the tonnages to be more competitive as the old chartered tonnages are being returned to owners, and in addition, we should exert great effort to re-establish relationships with customers in preparation for better market conditions," Yoo added.
He concluded: "HMM has overcome many difficulties throughout its 41-year history. Every time a crisis has hit us, we get united and turned crisis into opportunity. And we prevailed.
"After several years of hardship, we are finally about to grasp the precious opportunity for rebound."