NOTICE June 09, 2021
CEO Message on new business achievements and entreaty
Hyundai LNG Shipping is attracting attention in the shipping industry following the series of contracts that are recently concluded.
Representative Lee Gyu-bong of Hyundai LNG Shipping has sent a message to all employees through the in-house network, which is provided below to help
the interested parties better understand the current situation of the company.
Hello, all of Hyundai LNG Shipping’s members on land and at sea,
I hope everyone’s wellness in the time of pandemic.
Recently, there has been many reports in the country and abroad on our company’s long-term charter with global shippers and order for new ships required thereby.
This message is to clarify the details of news, although it may have been learned from the reports.
1. Hyundai LNG Shipping is transforming into a world class company.
The 7th foundation anniversary is around the corner.
When you recall the time that we started our company with only 7 LNG carriers of Korea Gas Corporation after spinning off from Hyundai Merchant Marine (HMM) 7 years ago,
you may have not envisioned the future that is unfolded ahead of us now.
We have been attempting to make changes in various fields to accomplish our vision,
“world-class LNG Shipping Company” by establishing a growth strategy for advance into the global market, internalizing core functions (naval academy, purchase, etc.), and introducing a performance-based culture.
There may still be inconveniences in making changes from what we were used to, but we are steadily progressing the transformation into a world class company through the inconveniences to accomplish the vision.
2. We have recently ordered 7 LNGCs and 5 VLGCs, 12 ships in total.
The details of ships that are newly ordered for the long-term charter that we have recently obtained are provided below according to our order book (including 3 option vessels):
Shipper |
Ship Type |
Term |
Petronas (Malaysia’s state-run energy company) |
174K LNGS (6 vessels) (Firm: 3 vessels, Option: 3 vessels) |
15 years + 5 years |
BGN (Dubai trading company) |
91K VLGC (2 vessels) |
7 years |
E1 |
86K VLGC (3 vessels) |
7 years (For one vessel, with an option of 3 years) |
REPSOL (Spain’s largest energy company) |
174K LNGC (1 vessel) |
10 years + 5 years |
As you can see, the shippers are all of the highest level in the world.
If we perform our business with them faithfully, our reputation will rise continually.
We should be proud of ourselves about these achievements.
Petronas is an energy company run by the government of Malaysia. It is a best shipper sought by prominent shipping companies across the world.
Shipping companies in Europe, Japan and China strived to win this deal, as well as Petronas’s subsidiary MISC, but we swept all ships triumphantly and made splendid achievement.
It must be historically unprecedented in the LNG shipping industry.
Repsol is the largest energy company in Spain. It is a best shipper in Europe desired by every shipping company. In particular, it is a major and prestigious energy company in Europe most loved by Norwegian and Greek ship owners. It must be a shock to many European ship owners that we signed with Repsol. It is highly significant that we won the deal from their territory and built a bridgehead to enter a relation with much more European ship owners upon it.
It is also deeply significant that we build the fleet of VLGCs (LPG ships) through contracts with E1 and BGN.
Especially with E1, I believe that an apparent strategic partnership has been formed by the addition of 3 VLGCs to the existing HLS Amber.
The new contract with global LPG trader BGN will enable us to scale up our VLGC business and double the competitiveness of LPG transportation business thereby.
3. We will grow 2 times in sales and 2-3 times in asset size by 2025 compared to 2020.
When the new ships mentioned above begin operation in 2025, our sales and asset size will be approximately 2-3 times that of 2020.
What shipping company could have made such a tremendous growth in short time?
We can have a strong pride about these achievements that we have accomplished.
It is not just a scale-up. It means that the sale will be diversified by a number of shippers, which will make our portfolio more stable,
and that we can form a virtuous cycle that enables sustainable growth if we actively respond to the various shippers’ periodic needs for new ships.
That is not all. We are not in the stage where we can discuss the specifics yet, but if we providently carry out the LNG long-term charter project of Qatar Gas,
P project of a leading company in Korea where we are shortlisted, Pavilion project where we are already chosen as the sole preferred bidder, and FSUR project that is eagerly pursued in Australia,
we will be able to make another quantum jump.
4. It starts from today!
Around the foundation anniversary last year, we had a strategic workshop with employees on land, some ship captains on vacation, and navigators with a theme of “Where are we, HLS?”.
In the workshop, we looked back on our past and shared the perception of our situation dispassionately to identify the means that will make us world class in future.
We talked about desperate efforts and sacrifices we need to endure individually to become the best in our own fields, because otherwise we would never be anywhere near the world class level.
It was especially after suffering an exit from two projects, PGNiG and INPEX to which we devoted all of our energies, so it was more painful to face the reality from a dispassionate point of view.
I presume that many would have concerned about our uncertain future.
However, I deeply appreciated the pain of failure at that time.
I could see our passion for new business and realized that we need to be more thoroughly prepared to achieve success, rather than just being enthusiastic.
I believe that many would have learned the same lesson as me, and it will make a good stepping stone for our current and future success.
Lastly, I would like to deliver the most important message. Let’s enjoy the pleasure of our current success for a moment and see that we are at the starting point where we should be absolutely committed.
We have promised to provide satisfactory services to the world best shippers, and it will not be easy. Their expectations will be far higher beyond our assumption.
Depending on our preparations in the following 1-2 years, we may grow through these opportunities or perish in the market dishonorably.
We should keep up our spirits and be determined to become world class on our own fields.
World-class employees make world-class teams, and world-class teams make a world-class company eventually.
I would like to entreat all of you to exert every effort to complete the transformation into a world-class LNG shipping company by thoroughly preparing for the challenges ahead of us
as we began our transformation brilliantly when no one had expectation on us, along with my favorite epigram below.
“Success is not final, failure is not fatal. It’s the courage to continue that counts!”
Sincerely,
Lee Kyu-Bong