Spun-off Hyundai Heavy unit aims to become world’s top 5 construction equipment maker

An affiliate spun off from Hyundai Heavy Industries Co., a major shipyard here, said Wednesday that it will become one of the world’s top five construction equipment makers by 2023.

In March, shareholders of Hyundai Heavy approved the company’s plan to hive off its noncore businesses, aimed at what it claims will boost each business unit’s competitiveness.

Under the plan, the shipyard split into four independent entities: shipbuilding, electronics, construction equipment and robotics.

Hyundai Construction Equipment Co. said it will generate 7 trillion won (US$6.21 billion) in sales by 2023 to become one of the world’s leading firms.

Its domestic sales almost doubled in the first quarter of 2017 from a year earlier, with its global sales jumping 30 percent on-year to reach 449 billion won.

Currently, its bigger rival Doosan Infracore Co. dominates the domestic construction equipment market.

Hyundai Heavy said earlier that it and its newly spun-off affiliates plan to spend a combined 3.5 trillion won on research and development over the next five years to stay competitive in each of their respective businesses.

The figure includes some 400 billion won for facility expansion, according to the companies.

Hyundai Heavy swung to the black last year from a year earlier, thanks in part to reduced costs and improvement in its non-shipbuilding business.

Net income came to 682 billion won last year on a consolidation basis, a turnaround from a loss of 1.36 trillion won a year earlier.

Sales dropped 15 percent on-year to reach 39.32 trillion won, while it logged an operating profit of 1.64 trillion won, a rebound from an operating loss of 1.54 trillion won tallied in the same period the year before, it said earlier.
Source: Yonhap