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Hyundai Heavy Industries Targets 13-Fold Increase in Sales of Wind-Energy
Hyundai Heavy Industries Co., the world’s largest shipyard, plans to increase wind-power sales 13- fold as concern about climate change spurs demand for alternative energy.
The shipyard may boost wind-power sales to as much as 2 trillion won ($1.7 billion) in 2015 from this year’s estimate of about 150 billion won, Vice President Yoon Byung Soo said yesterday in an interview in Gunsan, South Korea. Total sales at Hyundai Heavy may reach 21.6 trillion won this year.
“Although we entered into this business later than other global players, our goal is to become among one of the world’s top 10 makers by 2015,” Yoon said. “We are working very hard to achieve this goal.”
Hyundai Heavy plans to build more wind farms in South Korea and overseas markets, joining rivals Daewoo Shipbuilding & Marine Engineering Co. and Samsung Heavy Industries Co., to reduce its dependency on shipbuilding as slower economic growth and concerns about overcapacity has damped global demand for ships. Wind-power capacity worldwide may rise 21 percent a year through 2014, according to the Global Wind Energy Council.
“Hyundai Heavy is well positioned to grab demand in China as it will be the first among South Korean companies to build a plant in the fastest-growing wind market,” said Um Kyung A, an analyst at Shinyoung Securities Co. in Seoul. “This industry will be a growth driver for Hyundai Heavy.”
Hyundai Heavy rose 3.4 percent, the most in six weeks, to close at 273,000 won in Seoul. The shares have jumped 57 percent this year, the third-biggest gain in the Kospi50 Index, which has advanced 0.5 percent.
China Demand
Global wind-energy capacity may increase 6.5 percent to 40.8 gigawatts this year and may reach 409 gigawatts in 2014, helped by demand in Asian countries including China, according to the Global Wind Energy Council. China surpassed Germany last year to become the world’s biggest market for the energy, after more than doubling capacity to 25.8 gigawatts in 2009.
Revenue from shipbuilding accounted for less than half of Hyundai Heavy’s 21.1 trillion won total last year and may fall to 34 percent this year. The company also builds offshore structures, plants, marine engines and solar-energy equipment. Wind-power sales may account for about 10 percent of the total in 2020, Yoon said.
China Plant
The Ulsan, South Korea-based company has a plant in Gunsan, about 220 kilometers south of Seoul, that can manufacture 300 2- megawatt wind generators a year. It is building a second plant in China’s Shandong province under a venture with Datang Shandong Power Generation Co. to make wind-power equipment as demand for generators is expected to grow “significantly,” Yoon said.
The Chinese factory is expected to be completed in April and will have a capacity similar to the Gunsan plant, he added.
China spent $34.6 billion on clean-fuel projects last year, almost double the $18.6 billion invested by the U.S., according to estimates from Bloomberg New Energy Finance. About 20 gigawatts of new wind-power capacity may be installed in China this year, up 54 percent from 13 gigawatts in 2010, Yoon said.
Hyundai Heavy also plans to build wind farms in the U.S. and South America and may consider building plants in those countries, Yoon said.
“It is very important to accumulate experience in building wind farms to become a key player in the global market,” Yoon said. “And it also helps in securing financing for projects we plan to carry out.”
Wind Partners
The shipyard is building wind farms with partners including Korea Southern Power Co. and Hyosung Group, in Taebaek, about 300 kilometers east of Seoul, and North Cholla Province. It also signed a preliminary agreement in January with Korea Southern Power, Pakistan’s Yunus Brothers, and other partners to build a 50-megawatt complex in Pakistan.
Sales from wind power may total as much as 500 billion won next year, Yoon said.
Hyundai Heavy is “always looking for ways to increase sales, and that is why we have moved into new businesses such as wind and solar energy,” Yoon said.
Daewoo, the world’s second-largest shipyard, said last week it aims to generate 30 percent of its total sales from wind power in 2020. The company’s revenue from the business is expected to reach $25 million this year and $300 million in 2011, it said.
Samsung Heavy, the world’s third-largest shipyard, is building a plant in South Korea to build wind turbines.
To contact the reporter on this story: Kyunghee Park in Singapore at kpark3@bloomberg.net
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