HD Hyundai Mipo, the shipbuilding subsidiary of HD Hyundai Group, South Korea’s largest shipbuilding conglomerate, has strengthened its financial strength by partnering with Vietnam’s state-owned banks. The move is aimed at focusing on expanding HD Hyundai Mipo’s local business in Vietnam.
Khanh Hoa Province, Vietnam, May 24 – HD Hyundai Vietnam Shipbuilding, a joint venture between HD Hyundai Mipo and Vietnam National Shipping Lines (VIMC), has signed a short-term credit financing agreement worth VND3.8 trillion (about US$149 million) with Jointstock commercial Bank for Foreign Trade of Vietnam (Vietcombank) Khanh Hoa Branch on May 23rd.
It is understood that HD Hyundai Vietnam Shipbuilding and Vietcombank Khanh Hoa Branch signed their first short-term credit financing agreement in 2022 and have established a new partnership. Previously, the cooperation was limited to time deposits, salary payments and foreign exchange purchases.In February 2023, the size of the cooperation between the two parties increased to US$110 million from the initial US$50 million.
This cooperation is expected to create “win-win” synergies for both companies, as HD Hyundai Vietnam Shipbuilding will be able to quickly and securely access capital for local operations. Vietcombank Khanh Hoa Branch will be able to attract foreign investors first through HD Hyundai Vietnam Shipbuilding.
It is understood that HD Hyundai Vietnam Shipbuilding, located in Khanh Hoa Province in central Vietnam, was established in 1996 as a joint venture between Hyundai Mipo Shipbuilding (now renamed as HD Hyundai Mipo) and Vietnam National Shipping Lines. The shipyard covers an area of about 992,000 square meters, with a 400,000-ton dock and a 100,000-ton dock, and 1.4 kilometers of quay shoreline, and was initially engaged in ship repair and conversion business, and gradually transitioned to newbuilding business in the late 2000s.
HD Hyundai Vietnam Shipbuilding is currently focusing on building bulk carriers and tankers of 50,000 dwt to 80,000 dwt. By the end of 2023, its cumulative order book exceeds 204 vessels.
With a good record of orders and deliveries, HD Hyundai Vietnam Shipbuilding plans to achieve an annual capacity of 20 vessels by 2025 by continuously expanding production facilities and increasing productivity. So far this year, HD Hyundai Vietnam Shipbuilding has signed orders for 8 product tankers.
“The cooperation between the two companies is a prerequisite for a long-term partnership, which will increase future profits and drive the overall development of the shipbuilding industry,” said the official from Vietnam’s Khanh Hoa province, “We believe that the signing will help promote the Bank-Enterprise Linkage Program to ensure that credit funds reach the right enterprises for production and business development.”
