This company photo shows Samsung Heavy Industries Co.’s shipyard in Geoje Island, South Korea. The world’s second-largest shipbuilder says it won $1.5 billion in orders for nine large-sized container vessels from the Middle East.

Samsung Heavy wins order for 9 vessels from Middle East

HONG KONG—Samsung Heavy Industries Co., the world’s second-biggest shipbuilder, said it won a 1.58 trillion won ($1.5 billion) order from the Middle East to build nine large-sized container vessels, its single biggest order.

The ships, able to carry more than 10,000 20-foot standard containers each, will be delivered by November 30, 2011, Seoul-based Samsung Heavy said in a filing Monday, without naming the buyer.

Record oil prices and economic growth in emerging markets, including the Middle East and China, have increased demand for bigger vessels to transport commodities and consumer goods. Shipyards in South Korea, the world’s largest shipbuilding nation, are slated to win record orders for a sixth year.

“Bigger ships make economic sense because shipping lines can operate one large one instead of two and save on costs,” said Cho In Karp, an analyst at Good Morning Shinhan Securities Co. in Seoul. “This will be good for South Korean shipyards because there are only a few in the world that can build these vessels.” He rates Samsung Heavy a “buy.”

Samsung Heavy received $9.3 billion in orders this year, achieving 60 percent of its annual target of $15.5 billion. Yesterday’s order extended the company’s order backlog to about $45 billion, representing almost four years of work.

More than half of the global ship orders by tonnage were won by South Korean shipyards in the first five months of this year, according to shipbroker Clarkson Plc. Shipping lines ordered $44.6 billion worth of vessels in the first five months of this year, the London-based company said.

Hyundai Heavy Industries Co., Samsung Heavy and Daewoo Shipbuilding & Marine Engineering Co. received a combined $32.5 billion in orders this year, including yesterday’s contract. Their backlogs reached about $122 billion as of the end of May, with deliveries stretching into 2012.

Samsung Heavy’s order for the nine container vessels is the fourth-biggest for the industry. Daewoo Shipbuilding, the world’s third-largest shipbuilder, won a contract in December last year worth 2 trillion won, the industry’s biggest.

Hyundai Heavy, the world’s largest shipyard, won a $1.6 billion order in September 2006 from the United Arab Emirates and $1.55 billion in February this year from Nigeria.

South Korean shipyards are expected to win more than $12 billion worth of orders in June and July for vessels, drill ships and offshore platforms, Lee Jae Kyu, an analyst at Mirae Asset Securities Co., said in a June 17 report.

A.P. Moeller-Maersk A/S on June 24 ordered 13 container vessels worth 1.22 trillion won from Hyundai Heavy. Another five were ordered from Hyundai Samho Heavy Industries Co., a unit of Hyundai Heavy and the world’s fifth-largest shipbuilder.

Maersk may order another 16 vessels from Daewoo Shipbuilding worth $115 million apiece, TradeWinds reported on June 13, without saying where it got the information. Each of the ships would be capable of carrying 7,500 containers, the report said.

Shares of Samsung Heavy have dropped 6.7 percent this year, compared with an 11-percent decline in South Korea’s Kospi index.

Samsung Heavy wins order for 9 vessels from Middle East

HONG KONG—Samsung Heavy Industries Co., the world’s second-biggest shipbuilder, said it won a 1.58 trillion won ($1.5 billion) order from the Middle East to build nine large-sized container vessels, its single biggest order.

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