Hyundai Heavy Industries has begun work on a $4.3bn ship building complex in Saudi Arabia. The scheme is being developed as a joint venture between the Korean engineer and Aramco, Saudi Arabia’s state-run oil firm.
The aim of the project is to kickstart a shipbuilding industry in Saudi Arabia. Once the shipyard is complete, Hyundai will pass on its shipbuilding technology and expertise to the Saudis.
The project, which is to be called the "King Salman ship repair and shipbuilding complex", is part of Saudi Arabia’s "Vision 2030" industrial development plan, which aims to diversify the economy and lessen its dependence on oil and petrochemicals.
The complex will be built by 2021, at which time it will cover almost five square kilometres near Jubail Port on the kingdom’s Gulf coast.
Agreement on the project was reached on Wednesday, 30 November, when Hyundai Heavy Industries chairman Choi Gil-sun and senior executive director Chung Ki-sun met with Saudi Aramco president Amin al-Nasser.
The plan to build a shipbuilding complex in Saudi Arabia’s Eastern Province has been under discussion for a number of years. In 2013, it was reported that the scheme was to go ahead as a joint venture between Aramco and another Korean engineer, STX Heavy Industries.
The project was the subject of a memorandum of understanding between Hyundai and Aramco in November of last year.
According to Korean news agency Yonhap, the project will help Hyundai to weather an economic downturn in the shipping industry, which has been hit by overcapacity and sluggish growth in world trade. Hyundai Heavy has mapped out $2.6bn rehabilitation plan, including asset sales and a cut in the workforce, in order to stay afloat.
Image: Chung Ki-sun, senior executive director of Hyundai, receives an Arabian traditional coffee set as a gift from Aramco president Amin al-Nasser on 30 November (Hyundai)