As shipyards look to gain more orders and an increase in newbuild prices, South Korean shipbuilding yard Daewoo Shipbuilding and Marine Engineering (DSME) has gone into financial crisis mode.
On Wednesday DSME confirmed its debt ratio increased to 547% by the end of the first quarter. A loss in Russian ship orders, the rise of raw material prices and recent strikes by subcontractors have all factored in to the company’s economic issues.
DSME’s CEO Park Doo-sun said the yard has entered an emergency period.
“The recent recovery in orders has helped to solve the problem of low production volume and to normalize business, but the prolonged illegal strike of subcontractors is shaking expectations,” Park said in a statement Wednesday. “All executives, including the president, will operate on a 24-hour emergency system to take the lead in resolving the current crisis as soon as possible and create a company that can continue to grow.”
The shipyard, which is one of the largest in the world, is not the only Korean shipbuilder to be hit hard. Others are experiencing similar issues, as there are less workers at yards, which is heavily impacting the industry as it attempts to deal with backlogs of orders that go to 2025 and on.
