Rumors are circulating about a growing rift between Hanwha Group Vice Chairman Kim Dong-kwan and HD Hyundai Vice Chairman Chung Kisun.
HD Hyundai Heavy Industries, South Korea’s largest shipbuilding company, has been aggressively selling its marine engine products overseas, resulting in delays in procuring engines for its affiliated ships, according to sources on June 7. HD HHI’s trademarked HiMSEN engines, medium-speed 4-stroke engines for large ships, captured about 35% of the global market share for medium-speed marine generators last year.
HD HHI plans to produce over 1,000 engines this year, with an order backlog of approximately 2,700 units. The company’s engine machinery division reported sales of 2.798 trillion won ($2 billion) last year, up 58% from the previous year, with exports accounting for 97.2% of total sales. The engine assembly plant in Ulsan operated at 142.9% capacity last year. Marine engines are key components that account for 10% of a ship’s total cost.
The procurement delays have led to internal discussions within HD Hyundai about potentially sourcing engines from Hanwha Engine. Hanwha Group acquired HSD Engine in February, rebranding it as Hanwha Engine.
However, tensions between Hanwha Ocean and HD Korea Shipbuilding & Offshore Engineering have reportedly escalated into a personal feud between Kim and Chung, putting executives in an awkward position.
The rivalry between the two companies escalated when Hanwha Group acquired Daewoo Shipbuilding & Marine Engineering (now Hanwha Ocean) in May last year. The two companies are now competing in the U.S. specialty ship market and the 8 trillion won Korean Next Generation Destroyer (KDDX) project. Hanwha Ocean has even filed a complaint with the police to investigate allegations that HD HHI employees illegally obtained KDDX conceptual design reports from Daewoo Shipbuilding & Marine Engineering.
Kim and Chung both attended the Posidonia 2024, a shipping exhibition held in Athens, Greece, from June 4 to 7. “The relationship between Kim and Chung has been delicate since Hanwha acquired Hanwha Ocean, and it further deteriorated when Hanwha Group sought to acquire the Philly Shipyard in the U.S. through Hanwha Ocean last year,” said an industry insider.
