Hanwha Group’s big plans for Philly include LNG carriers

Hanwha Philly Shipyard {Photo: Hanwha Group]

Korea’s Hanwha Group has big plans to increase production at the Hanwha Philly Shipyard that include building LNG carriers. Korea Economic Daily reports that Hanwha Group recently invited a group of Korean financial analysts to the Philadelphia shipyard and told them it plans increase the shipyard’s revenue by tenfold to $4 billion per year within a decade, fueled by high-value commercial ships and contracts for US Navy logistics support vessels.

Production capacity will be increased from 1.5 vessels to 10 per year as the yard is transformed into a mid-to-large-sized shipbuilder that will be the first U.S. shipyard in decades to build LNG carriers, an area in which Hanwha Ocean in Korea is among the world leaders.

The U.S. Trade Representative’s Section 301 action to restore American shipbuilding in response to Chinese actions includes provisions aimed at seeing an increasing proportion of America’s LNG carried in U.S.-built ships.

“One of the U.S. government’s top priorities is fostering the domestic construction of high-value vessels such as LNG carriers,” Korea Economic Daily quotes a Hanwha Group official as saying. “Given Hanwha Ocean’s expertise in LNG shipbuilding, we’re confident we can construct these vessels successfully in the U.S.”

he yard, which operates Docks 4 and 5 out of its five drydocks, is now undergoing process optimization and facility upgrades to boost output at Dock No. 4 from the current one to four vessels annually and reportedly will also reactivate Dock No. 5, currently used only as a quay, by refurbishing it for full production.

“Philly Shipyard plans to boost productivity by addressing key bottlenecks in its operations, including expanding its painting facility to eliminate process delays,” Choi Kwang-sik, an analyst at Daol Investment & Securities told KED.

Analysts say that barriers that Hanwha will have to overcome include labor costs and shortages, particularly of welders with the skills required for LNG carrier construction.