South Korea’s Hyundai Merchant Marine (HMM), the world’s eighth-largest container shipping company, has unveiled a massive investment plan to achieve sustainable growth by 2030, with investments amounting to KRW 23.5 trillion ($17.6 billion) in four major areas, namely, container transportation (KRW 12.7 trillion), bulk transportation (KRW 5.6 trillion), integrated logistics (KRW 42 trillion), and competitiveness enhancement (KRW 1 trillion). By 2030, HMM will nearly double the size of its container ship fleet and nearly triple the size of its tanker and dry bulk fleet.
HMM’s move is aimed at expanding its business portfolio for future growth, advancing its position as a global green shipping and logistics carrier, enhancing its ability to respond quickly to global environmental regulations, and working to accelerate achievement of its 2045 net-zero carbon emissions target.
Under the Sustainability Plan, HMM will invest 14.4 trillion won (more than 60 percent of the total investment) in the area of sustainable management measures, including low-carbon ships and green facilities.
In the container shipping sector, HMM plans to spend KRW 11 trillion to ensure that the size of its container ship fleet will be increased to 130 ships and 1.5 million TEU, aiming to prepare for the restructuring of the Global Container Shipping Alliance and to strengthen the competitiveness of its core business. In view of the fleet expansion, HMM will also invest KRW 1.7 trillion in containers to improve operational efficiency, according to Alphaliner data, which shows that the current size of HMM’s container fleet is about 868,200 TEU.
To meet the market demand for environmentally friendly transportation, HMM plans to acquire about 70 green ships by 2030 and establish a carbon-neutral ecosystem in all transportation sectors by 2045.
In the bulk transportation sector, HMM plans to invest KRW 5.6 trillion in expanding its bulk transportation business by expanding its fleet size from the current 36 ships to 110 ships (12.56 million dwt), and enhancing profitability by building a stable portfolio that is not biased toward a specific bulk market (tankers/dry bulk). The company also plans to diversify its business by launching operations in the environmental energy transportation sector and gaining significant market share at an early stage.
It is worth noting that HMM has announced its fleet expansion plan as early as April this year, announcing the construction of 46 new container ships and 74 new bulk carriers and other ships by 2030, totaling 120 newbuildings. According to the medium and long-term strategy set by HMM, by 2030, HMM plans to increase the size of its container ship fleet from 84 ships and 920,000 TEU to 130 ships and 1.5 million TEU; in other areas such as bulk carriers, it plans to expand its fleet from 36 ships and 6.3 million dwt to 110 ships and 12.28 million dwt.
In the integrated logistics sector, HMM plans to spend KRW 4.2 trillion on enhancing shipping and logistics infrastructure. To improve customer service, HMM will expand terminals and acquire additional port terminals for key bases to accommodate growing capacity; expand its off-dock container yard (ODCY) business and integrated logistics business to provide end-to-end services.
Regarding to improving competitiveness, HMM is actively working toward the 2045 net-zero emissions target in order to strengthen its response to environmental regulations and achieve carbon neutrality. To achieve this goal, HMM will spend KRW 1 trillion to retrofit ship engines, secure a green fuel supply chain, and improve operational stability and efficiency through digitization; it plans to develop new sustainable businesses and strengthen its organization and human resources to implement its mid- to long-term strategy for 2030.
Kim Kyung Bae, President & CEO, HMM says: “By strengthening partnerships founded on trust, we are enhancing the quality of service we deliver to our customers. We remain committed to developing a resilient business portfolio and positioning ourselves as a global leader in eco-friendly shipping for the future.”
In the first half of this year, HMM realized operating income of KRW 4.993 trillion, up 18.6% year-on-year; net profit of KRW 11.46 trillion, up 88% year-on-year; operating profit of KRW 105.1 billion, up 125% year-on-year; and operating profit margin of 21.1%, which is among the highest among global shipping companies.
