South Korea's Hyundai Heavy Industries (HHI) Group announced Thursday that it has entered into a general memorandum of understanding (MOU) with Saudi Aramco, the world’s leading integrated energy and chemicals company, to jointly collaborate on business development opportunities in the Kingdom of Saudi Arabia.
The signing ceremony was presided by Amin H. Nasser, president and CEO of Saudi Aramco at the headquarters of Saudi Aramco in Dhahran, Ki-sun Chung, head of HHI Corporate Planning, accompanied by Jeong-Hwan Kim, COO of HHI Shipbuilding, and Cheul-ho Park, COO of HHI IP&E (Industrial Plant and Engineering). HHI signed a general MOU with Saudi Aramco’s President and CEO. The MOU lays out a comprehensive multi-faceted business cooperation framework going forward, in areas such as EPC (engineering, procurement and construction), downstream, casting and forging in addition to initiatives in progress to support the Maritime Industry and diesel engines manufacturing in Saudi Arabia.
The strategic collaboration discussion was initiated when Saudi Aramco’s Board of Directors visited HHI’s Ulsan complex in April 2015. Chung, who represented HHI for all relations with Saudi Arabia and Saudi Aramco, led the efforts that culminated with the signing ceremony.
Chung said "The partnership between the two industrial behemoths not only means a great opportunity to enhance Korea's shipbuilding and EPC businesses, but also extends the Hyundai Groups’ contribution to the Kingdom stretching back to the 1970s when it was awarded a contract to undertake development of the Jubail port (King Fahd industrial port) project. This signing is significant as it provides the potential for the creation of another Jubail that creates tremendous growth opportunities for HHI."
Saudi Aramco has championed the development of a comprehensive Maritime Yard within Ras Al-Khair, in coordination with the National Shipping Company of Saudi Arabia (Bahri) and HHI as potential partners. The Yard will leverage the partners expanding offshore business to accelerate localization efforts of the Kingdom’s young and promising maritime industry, and its associated supply chain. HHI is expected to win orders of building vessels while participating in construction and operation of the maritime yard and to gain opportunities of various value added services.
Moreover, the joint effort enables the partners to cater to growing Middle East vessel demand and to enjoy advantage of the yard to build vessel types that are no longer profitable to be built in Korean shipyards.
Another potential business segment is the engine business, which is closely associated with shipbuilding, and which both parties will explore with a view to a future joint venture. In particular, HHI-developed HiMSEN can benefit from the joint development to expand its market presence. The endeavor includes expanding HiMSEN-based Engine for Marine and Power Plant businesses in the region and can serve regional production stronghold as well as meeting growing demand of power from developing countries surrounding regions.
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