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An Even Keel Amid Market Doldrums

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					                            Heavy Industries                                                                                                                  www.hhi.co.kr

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                                                                                                                     NewHorizons
                                                                                                                 A Publication of Hyundai Heavy Industries   September-October 2002
                            In the realm of heavy industries, our technologies are everywhere,
                            improving everyone’s quality of life and happiness.
                            We are building a world of shared dreams.


                                                                                                                      HHI’s Shipbuilding Division


                                                                                                                      An Even Keel Amid
                                                                                                                      Market Doldrums




                                                                                                 www.hhi.co.kr


New Breed of
                765kV Power Transformer   Industrial Plant
 Drilling Rig
                                                                            New Horizons
                                                                                     September-October 2002




                                                                                                                                                                                                                                   5
                                                                                                                          16                                                 9                                        23

                                                                                                                                              CONTENTS
                                                                                4         Message from the CEOs                                                19         Viewpoint
                                                                                          Bright Prospects Despite Global Uncertainty                                     Industry History:
                                                                                                                                                                          Rising to New Challenges

                                                                                5         Cover Story
                                                                                          HHI’s Shipbuilding Division:                                         20         IR News
                                                                                          An Even Keel Amid Market Doldrums                                               Sales Strong Despite Weak Dollar


                                                                                9         HHI Roundup                                                          22         Technology
                                                                                                                                                                          Engine Control System for Medium Speed
                                                                                                                                                                          Diesel Engine
                                                                               15         People
                                                                                          Executive Vice President of Engine &
                                                                                          Machinery Division Cho Byung-sang:
                                                                                                                                                               23         Korean Panorama
                                                                                                                                                                          Traditional Korean Medicine:
                                                                                          Looking Beyond Today
                                                                                                                                                                          Sasang Constitutional Medicine

                                                                               16         Photo Essay
                                                                                                                                                               27         Overseas Network
                                                                                          International Supervisors at HHI




                                                                             New Horizons is published by Hyundai Heavy Industries Co., Ltd. for enthusiasts of the future and friends of the shipbuilding and heavy industries.
                                                                             It is produced by Hyundai Heavy Industries Co., Ltd. Edited and designed by KorCom International Inc. (tel: 82-2-538-2580). New Horizons is
                                                                             distributed free of charge. For a complimentary subscription, contact Hyundai Heavy Industries Co., Ltd. at tel: 82-52-230-2344, fax: 82-52-230-
                                                                             2347. New Horizons is now available online. Go to the HHI homepage (www.hhi.co.kr). The opinions expressed by the authors are not necessarily
                                                                             those of Hyundai Heavy Industries Co., Ltd.



Ganggangsuwollae is held as part of Korea’s national folk sport festival.
                                              Message from the CEOs

                                                                                                                                                                        Cover Story

       Bright Prospects Despite Global Uncertainty
            Uncertainty in the global                                                               Offloading) vessel on dry
        economy continues. The US                                                                   land. Besides, the offshore      HHI’s Shipbuilding Division
        faces shaky financial mar-                                                                  oilfield development activi-
        kets, a plummeting stock
        market and weakened dollar.
        In addition, the EU and other
        advanced economies are not
                                                                                                    ties increased by high oil
                                                                                                    prices provide HHI good
                                                                                                    prospects for landing large-
                                                                                                    scale offshore facility pro-
                                                                                                                                     An Even Keel Amid
        expected to grow by more                                                                    jects.
        than 2% this year.
            With delayed global eco-
        nomic recovery, the business
        environment is predicted to
                                                                                                        Electro Electric Systems
                                                                                                    has had positive responses
                                                                                                    from the US market with
                                                                                                    increased transformer exports
                                                                                                                                     Market Doldrums
        be uncertain in the second                                                                  and new order negotiations.
        half of this year.                                                                          The technological sophistica-
            In the first half, Hyundai                                                              tion and reliability of our
        Heavy Industries achieved                                                                   products are being evaluated
        sales of 3.8 trillion, up                                                                   more highly in the most
        7.7% year on year. Operating        (From the left) Mr. Min Keh-sik, Mr. Choi Kil-seon      advanced markets nowadays.
        income came to 290 bil-                                                                         In August we held an
        lion, down 6.3% from a year                                                                 annual sales conference for
        earlier due to the appreciation                                                             overseas branch chiefs at the
        of the won against the dollar.
                                                    Recently, we have been                          Head Office in Ulsan. At the
        However, we expect that we               focusing our competencies                          conference, we reaffirm our
        will achieve the annual target                                                              business philosophy. Namely,
        set for this year. As of the                       on added value.                          HHI aims to ensure clients’
        end of July, HHI has a $9.1-                                                                satisfaction and pursue mutu-
        billion order backlog includ-                                                               al prosperity by providing the
        ing 110 vessels in shipbuilding. This is an workload for         best quality products and services. We are committed to
        the next two years.                                              working closely with our clients and business partners
            Recently, we have been focusing our competencies             for that purpose.
        on added value. Shipbuilding is working together with                We cordially ask for your continued support and
                                                                                                                                                                                       By Andy Chung
        EnerSea Transport LLC of US to develop a new-con-                patronage.
        cept Compressed Natural Gas (CNG) carrier. The CNG
        carrier does not require reliquefying and revaporizing
                                                                                                                                          New ship orders are down amid rising competition
        processes, saving hundreds of millions of dollars in
        LNG terminal construction costs.
                                                                                                                                          from newcomer China and traditional rival Japan. To
            Offshore & Engineering has opened a new chapter                                                                               bolster its position, HHI’s Shipbuilding Division is
        in the construction of deep-sea offshore structures by                       Choi Kil-seon               Min Keh-sik
        building a very large FSO (Floating, Storage &                             President & CEO             President & CEO            boosting value added and shifting to more sophisticat-
                                                                                                                                          ed vessels, while eyeing the luxury cruise ship market.

4 New Horizons                                                                                                                                                                          September-October 2002 5
    Cover Story




      NEW CHAPTER                                                        oil tankers. Two years later, a ceremony was held to commemo-      builders (Daewoo Shipbuilding and Samsung Heavy, respec-               But many agree Korean shipbuilders look best poised to
          In March 2002, Hyundai Heavy Industries Co Ltd (HHI),          rate the completion of the shipyard, and at the same time the      tively) dropped 31.1% from a year ago to 1.7 million compen-       weather the global slowdown thanks to their drive to shift to
      the world’s top-ranked shipbuilder, celebrated the delivery of     christening of the two VLCCs. The world’s shipbuilding com-        sated gross tons (CGTs), a measurement reflecting different        higher value segments of the shipbuilding market. Compared to
      its 1,000th ship-the 113,000-DWT crude oil carrier “Overseas       munity calls the event the “Hyundai Shipyard Myth.” Until that     levels of value-added ships. The order backlog at the end of       Japanese yards, latecomer Koreans have more up-to-date facili-
      Portland”-to Overseas Shipholding Group. Inc. of the US.           time, the largest ship Korea had ever built was a 17,000-DWT       June fell 12% to 15 million CGTs at Korean shipyards from a        ties in more efficient layouts, and Korean shipbuilders are geo-
      Since its inception in 1972, Hyundai has delivered ships total-    cargo ship and Korea’s market share was less than 1%.              year earlier as a result of steady construction despite a slow-    graphically concentrated in one area-a vital condition for effi-
      ing 77.5 million DWT to 188 shipowners in 42 countries. The                                                                           down in new orders. Korean shipbuilders had boasted their          cient operations-while Japanese facilities are widely spread out.
      sheer volume is unprecedented for a single shipbuilding compa-     GLOBAL SLOWDOWN                                                    order backlog would be enough to keep their yards fully occu-          Korean yards have successfully explored markets for lique-
      ny. It is all the more impressive because it was accomplished in       Since new orders peaked at 46 million GT in 2000, Korea’s      pied for 2.5 years. But now, with the exception of Daewoo,         fied natural gas (LNG) carriers and other high value-added ves-
      such a remarkably short period of time.                            shipbuilding companies have been severely hampered by the          their workload has dropped to two years. The outlook appears       sels. Particularly attractive is that LNG ships are less vulnerable
          HHI currently constructs approximately 15% of all ships        lingering economic uncertainty. Korean shipbuilders won 20.8       to be gloomy as ship prices have fallen about 10% from a year      to economic cycles as global tightening of environment rules
      produced worldwide and in 2001 alone delivered 56 vessels          million GT in that year, representing more than 40% of the         ago, reflecting the tightening market conditions.                  steadily creates demand for the clean energy. In 2001, Korean
      totaling five million DWT. Hyundai’s success is based on more      entire market, followed by 13.5 million GT by Japanese yards,          The Korean shipbuilding industry’s nervousness when            shipbuilders won 21 of the orders for 29 LNG carriers, includ-
      than luck. Founder Chung Ju-yung, one of the world’s most          and the balance by European and Chinese companies.                 Japanese builders overtook Korea’s position as the world leader    ing six received by Hyundai Heavy. That is on top of nine out
      successful businessmen, persuaded a Greek shipping firm to             New shipbuilding orders placed globally in 2001 were           in annual new orders in 2001 and in the first half of 2002 was     of 14 LNG ships ordered worldwide in 2000.
      place an order for two 260,000-DWT very large crude oil carri-     down at 36.5 million GT, and the forecast for 2002 was a fur-      augmented when Chinese rivals almost doubled their new                 In latest foray into more sophisticated niches of the ship
      ers (VLCCs) even before his shipyard was completed. With           ther 30% drop to 26 million GT. Lingering concerns over the        orders in 2001 from the previous year. Japanese orders were        market, Hyundai Heavy has agreed with EnerSea Transport
           only a blueprint of a beach site where the Hyundai yard       global economy after the September 11 terrorist attacks on the     14.6 million GTs last year, whereas Korea’s totalled 11.8 mil-     LLC of the US to jointly develop compressed natural gas
                  was to be built, he was able to fend off competition   US had discouraged shipowners from placing new orders. But a       lion GT. New orders at Chinese yards jumped to 4.1 million GT      (CNG) carriers. Different from conventional LNG ships, the
                           from Japanese and European yards with a       retreat had been already anticipated, even before the current      in 2001 from 2.6 million GT a year ago. During the first half of   new ships do not require reliquefying and revaporizing process-
                                     hundred years of experience to      economic weakness, after the remarkable shipbuilding fever in      2002, the Japanese were still ahead of the Koreans, winning        es, thereby saving hundreds of millions of dollars in LNG ter-
                                                          snatch the     2000, when shipowners’ efforts to keep or expand their share in    8.86 million GT against 7.49 million GT for Korea.                 minal construction costs. With LNG ships it is quite costly to
                                                          Greek order.   the boom years resulted in excessive new orders.                                                                                      liquefy natural gas, because the temperature is brought down
                                                            Work pro-        Seoul’s Commerce Ministry said in July Korean ship-            TOO EARLY TO WORRY                                                 below minus 163 degrees Celsius to achieve conversion. HHI
                                                             ceeded      builders suffered a 30% fall in new orders in the second quarter       Some experts say Korea’s reversal was largely because          plans to complete designs for the CNG ships by the end of 2002
                                                              simulta-   with the global economy still in limbo. Falling orders and con-    Korean yards had become more selective in picking new orders       and secure an approval from the classification society in early
                                                            neously      cerns about a long-term slump would lead to price-cutting in       due to capacity limits and their heavy backlog, while others       2003. The CNG will be popular with shipowners, Hyundai offi-
                                                         on the ship-    the second half and beyond. New orders in the quarter ending in    contend that it was because Japanese still maintained a competi-   cials say, as environmental activist groups are moving to pro-
                                                    yard and the two     June at companies including the second and third largest ship-     tive edge.                                                         hibit gas free aeration by 2008. The natural gas produced as a


6 New Horizons                                                                                                                                                                                                                                              September-October 2002 7
    Cover Story

      byproduct in the course of exploring crude oil will be gathered
      and effectively transported by the CNG ships.
          Despite a downturn since 2001, Hyundai Heavy is confident
      of boosting its new orders. It aims to use its leading position in
      the shipbuilding industry and aggressive marketing to rebuild
      its order book in years to come. Its 2002 new ship orders are
      forecast to rise to $3.0 billion, up 50% from $2.0 billion in
      2001. “As the industry leader, Hyundai Heavy can offer the
      most attractive package of incentives,” says Han Dae-youn,
      Hyundai’s executive vice president and chief marketing officer.
      “Now that our order backlog begins to fall, I think it is about
      time to adopt a more aggressive marketing strategy.”                 Korean yards to begin building cruise ships due to a lack of          HHI Roundup
      CHALLENGES FROM CHINA, EU
          Korea’s dominant position in shipbuilding is under new
      pressure both from China, as the Won’s appreciation against the
      dollar cuts into Korea’s price competitiveness, and from the
      European Union, as it threatens to take its shipbuilding dispute
                                                                           infrastructure in Korea.
                                                                                Builders admit their involvement in the cruise ship sector
                                                                           will be limited because the sector requires a very different oper-
                                                                           ation of facilities and well-developed supporting industries,
                                                                           such as interior designers and outfitters.
                                                                                However, the market for luxury cruise liners is enticing for
                                                                                                                                                     Companywide

                                                                                                                                                     Shipbuilding
                                                                                                                                                                    HHI Roundup
      with Korea to the World Trade Organization (WTO). Aided by           Korean shipbuilders, with new orders expected to be between
      cheap labor and state support, Chinese shipyards are catching        20 and 30 ships. Such ships are currently priced at $300 million
      up fast in the lowersegments of VLCCs, containerships, and           to $400 million. Korean industry analysts say demand for cruise
                                                                                                                                                     Offshore & Engineering
                           bulk carriers. Some experts say it may be       ships may grow fast in Asia as economic growth in the region
                                just a matter of time before Chinese
                                    yards take over the low- and mid-
                                                                           will spark cruise tours to Southeast Asian destinations.
                                                                                Korea’s ambition is driving European yards, which see the
                                                                                                                                                     Industrial Plant & Engineering
                                      segments from Korea and              cruise market as their home turf, into a collision course with
                                       Japan.                              Korean shipbuilders. In late June, the European Commission                Engine & Machinery
                                            But Koreans are also fast      received a green light from the EU Council to carry out its plan
                                        and innovative in creating the     to let EU governments subsidize their shipyards and to take the
                                        types of ships that are in com-    dispute with Korea to the WTO. Implementation of the plan                 Electro Electric Systems
                                       petition with Chinese yards.        would be put on hold until the Commission finishes negotia-
                                    Advantages such as better              tions with Korea by the end of September.
                                  designs, more competitive options,            The Commission says it believes the Korean government                Construction Equipment
                                and a shorter delivery, among others,      has provided illegal subsidies to its shipbuilders through export
                                    will keep Chinese shipmakers at        schemes or debt forgiveness, thus helping them to win orders
                                      bay for the time being.              below market prices. But Korea denies the accusation and
                                       However, this does not appear       asserts the EU firms need to restructure as Korean shipyards
                                        to be only strategy Korean         have become more competitive. The two sides failed to narrow
                                        yards will employ to safeguard     the gap in their opinions in a meeting held in Seoul in August.
                                        their future.                      They will meet again in mid-September in Brussels in a last-
                                           Korean shipbuilders have        ditch effort to divert a full-blown trade dispute between the two
                                     begun to make inroads into the        parties.
                                  luxury cruise ship market by solic-           European shipbuilders still want Korean yards to raise ship
                               iting orders for roll-on roll-off (ro-ro)   prices by up to 20% as their containerships and chemical carriers
                                   passenger car ferries in recent         are on the verge of being driven out of the market because of
                                      years. This turn of events must      Korea’s dumping practices. But Korean shipbuilders say they are
                                       have startled European ship-        selling ships at a profit and contend it would be perverse to raise
                                        builders, who enjoy a bigger       prices when the market is slowing. They say it also makes little
                                        share of the shipbuilding mar-     sense to claim that European yards are being hurt by Korean
                                        ket, in terms of monetary          yards, since the production lines of the two parties barely over-
                                       value, by specializing in the       lap.
                                     most expensive cruise liners.
                                   However, it may take five years for     The writer is a journalist based in Seoul.


8 New Horizons                                                                                                                                                                        September-October 2002 9
       HHI Roundup


                                        COMPANYWIDE                                                     COMPANYWIDE                    while this year 53 people passed-the                                            SHIPBUILDING
                                                                                                                                       highest number ever for a single com-
                                                                                            First Place in Corporate Image
        O’seas Branch Chief Conference                                                         HHI has taken first place in the
                                                                                            Heavy Industries’ Shipbuilding Field of
                                                                                                                                       pany in the field.
                                                                                                                                                                                      New CNG Carrier Development
             The chiefs of                                                                  the “Consumers’ Corporate Image                                                               HHI and
         HHI’s overseas                                                                     Survey” in Korea.                                                                         EnerSea
         branch offices                                                                        The survey, conducted by Korea                                                         Transport L.L.C.
         (London, Oslo,                                                                     Management Association Consulting                                                         of the US have
         Tokyo, New Jersey,                                                                 (KMA Consulting), involved 4,000 con-                                                     joined in strate-
         etc.) met with                                                                     sumers, age 20 or above, and asked                                                        gic partnership
         senior management                                                                  questions regarding 44 different busi-                                                    to design and
         at the Head Office                                                                 ness fields.                                   Announced at the “31st Master              develop a new
         to discuss                                                                            Consumers evaluated corporate           Technician Test” presentation, the             Compressed
         approaches to                                                                                                                 results show that 53 successfully              Natural Gas (CNG) carrier.                   Twelve cargo hold of the new
         boost overseas                                                                                                                passed the test, bringing the total                Differing from the LNG carrier       CNG carrier will contain 2,400 large
         sales and establish                                                                                                           number of masters at HHI to 169.               that keeps LNG at -163°C at near         pipes and have a complex function-
         second-half sales                                                                                                                 The results reinforce the top posi-        atmospheric pressure, the CNG car-       al structure. Building this high-pre-
         strategies to cope                                                                                                            tion HHI holds in technical skills.            rier is a high-tech vessel that allows   cision value-added vessel demands
         with changing mar-                      current status of each overseas                                                           Of the 87 who passed the test in           natural gas to be transported at a       HHI’s technical expertise and ship-
         kets. The event was held August         market, and establish proper mar-                                                     the Ulsan area, 60% are HHI employ-            temperature of -29°C (-20°F) and         building capacity.
         19-21.                                  keting strategies to improve over-                                                    ees. Also, at least eight of those             pressures up to 128 bar (1850 psi) in        The vessel will be 266 m long,
             On the first day, sales reports     seas sales.                                                                           employees already have master certifi-         a gaseous state.                         46 m wide, and 26 m deep.
         were given on the first-half perfor-        In his welcoming address, HHI                                                     cates in other sectors.                            Having one fourth of the load            Mating EnerSea’s tanker design
         mance from each branch office.          Chairman Kim Hyung-byuk men-               image according to several criteria.                                                      capacity of LNG, CNG carriers do         and transportation system along
         Then plans were presented for the       tioned the importance of the over-         The survey asked respondents how                                                          not require the additional and cost-     with HHI’s hull design and propul-
         second half of this year.               seas offices during times of a glob-       familiar they were with the companies                   SHIPBUILDING                      ly processes in LNG transportation,      sion mechanisms, the ship’s
             This annual event is an oppor-      al business slowdown. He called on         in question and how they came to                                                          such as reliquefying and revaporiz-      design will be completed by the
         tunity for officials from the Head      everyone present to do their best          know about those they identified,          105,000 DWT Tanker Named                       ing the gas.                             end of this year.
         Office and branches to meet face to     to achieve new order targets in the        whether it was because of personal             The Shipbuilding Division held a
         face to get a better picture of the     second half.                               preference or by knowledge of the          naming ceremony for the 105,000 dwt
                                                                                            companies’ product/service quality,        crude oil carrier ordered by Eletson
                                                                                            contributions to the community, or         Corporation of Greece on Aug. 14. Choi                  SHIPBUILDING                    Nigerian shipowner and Korea’s sec-
                                                                                            technological advances.                    Kil-seon, president of HHI, Gregory                                                     ond LNG carrier delivered to an over-
                                                                                                The survey revealed that the gener-    Hadjieleftheriadis, president of Eletson,   LNG Carrier Delivered                       seas shipowner.
                  COMPANYWIDE                    Channel spent more than one year mak-      al public in Korea is familiar with HHI,   and 60 other guests attended the cere-         The Shipbuilding Division deliv-             LNG Sokoto is 288 meters long and
                                                 ing this documentary program, titled       whose top position was significantly                                                   ered a 137,000m3 LNG carrier ordered        48 meters wide. She is powered by a
     HHI on Discovery TV                         Super Structure. This is an unprece-       higher than the company coming in                                                      by Bonny Gas Transport Ltd. (BGT) of        31,500bhp steam turbine engine manu-
         HHI was featured on a world-            dented case that a leading global TV       second place in the same field.                                                        Nigeria.                                    factured by HHI, enabling her to cruise
      famous documentary TV station, the         channel has put a Korean company on            KMA Consulting stated, “The cor-                                                      The vessel, which was named LNG          at a service speed of 19.75 knots.
      Discovery Channel based in the US, as      air exclusively for one hour.              porations selected this year did not
                                                     The program featured HHI’s             heighten their visibility through catchy
                                                 advanced shipbuilding facilities, the      slogans or business philosophy, but                                                                                                        OFFSHORE & ENGINEERING
                                                 detailed process of shipbuilding, peo-     by emphasizing ‘transparency’ and
                                                 ple working at HHI and so on. The leg-     ‘ethical management.’”                                                                                                             Safety Workshop
                                                 endary founding story of HHI and the                                                                                                                                             The Offshore & Engineering
                                                 late founder Chung Ju-yung were also                                                  mony. The vessel was named                                                              Division organized the 6th Safety
                                                 introduced.                                            COMPANYWIDE                    Makronissos by her sponsor Mrs.                                                         Workshop at Hotel Hyundai,
                                                     The Discovery Channel has a truly                                                 Denise Heil. The ship measures 244m                                                     Gyeongju.
                                                 global reach, with services available in
                                                                                            Number of Master Technicians Rises         in length, 42m in width and 21m in                                                         Chief Operating Officer Uh Sung-
                                                 155 countries and territories in 33 lan-      Last year HHI saw 42 employees          depth with a service speed of 15.1                                                      joon, representatives of major oil com-
      the world’s largest shipyard, along with   guages reaching over 400 million           gain “master technician” status by         knots. She is powered with 18,420 bhp       Sokoto, is the second of three identi-      pany clients and 80 members of the
      Pentagon and Boeing. The Discovery         households worldwide.                      passing a standardized national exam,      engine built by HHI.                        cal LNG carriers ordered by the             management team attended the work-


10 New Horizons                                                                                                                                                                                                                                   September-October 2002 11
       HHI Roundup


                                     OFFSHORE & ENGINEERING                                 intense heat in small spaces.                                                 ENGINE & MACHINERY                                        link length, pivot location, and fixed
                                                                                                                             Unlike                                                                                                 angle in order to get the desired func-

         FSO Completed on Land                                                                                           Torch which
                                                                                                                         utilizes gas,
                                                                                                                         Inconel
                                                                                                                                              15-MW DPP in Israel                                                                   tions.
                                                                                                                                                                                                                                        However, by using the newly devel-
                                                                                                                                                                                                                                    oped program, design of the link
            The Offshore &                                                                                               Infrared Ray                                                                                               mechanism allows optimal perfor-
                                                                                                                                                  The Engine & Machinery
        Engineering Division has suc-                                                                                    Heater uti-                                                                                                mance to be achieved quickly and with
                                                                                                                                              Division (EMD) has been
        cessfully launched out a                                                                                         lizes electrici-                                                                                           less labor. Furthermore, optimized
                                                                                                                                              awarded an EPC contract by an
        super-large FSO (floating,                                                          ty, reducing the cost of energy use by                                                                                                  presses contribute to enhancing the
                                                                                                                                              Israeli IPP developer, Noga Paz
        storage & offloading) of                                                            30% while also improving productivity                                                                                                   quality of the finished products.
                                                                                                                                              Omega (NPO) for the construc-
        340,000 dwt after on-land                                                           by 40%, contributing greatly to                                                                                                             The new design program has been
                                                                                                                                              tion of a 15-MW diesel power
        construction.                                                                       improving both the cost of energy and                                                                                                   partly applied to the design of the link
                                                                                                                                              plant in Israel. The plant is to
            This is the first attempt in                                                    productivity.                                                                                                                           mechanism of 2,300-ton, 1,500-ton,
                                                                                                                                              be built near Haifa. NPO will
        the world to build a vessel-                                                            Furthermore, Inconel plays a major                                                                                                  and 1,300-ton large presses produced
                                                                                                                                              operate the plant under the
        type offshore structure on                                                          role in improving the work environ-                                                                                                     by HHI and its application will be
                                                                                                                                              supervision of Hyundai and
        land, rather than in a dry                                                          ment by eliminating soot and odor pro-                                                                                                  expanded.
                                                                                                                                              supply electric power to the
        dock, and its success has                                                           duced by using Torch.
                                                                                                                                              designated area. EMD will
        opened a new landmark in                                                                In its application on the jack-up
                                                                                                                                              manufacture and supply two                                                                     ENGINE & MACHINERY
        the construction technology                  As far as FSOs are concerned, this     type oil drilling rig of A.P Moller,
                                                                                                                                              units of Hyundai-MAN B&W
        of offshore vessels.                     is the first time that one was com-        Denmark, it has been proven to be very
                                                                                                                                              18V32/40 engines for the plant as       by the successful completion of 60-           Highly Efficient Conveyor Delivered
            This innovative method includes      pleted on land all throughout the          effective and received favorable
                                                                                                                                              the prime mover. Commercial opera-      MW DSW (Dead Sea Works) diesel
        the following processes: After about     construction period. This $143-mil.        response from the client.                                                                                                                   A conveyor system capable of han-
                                                                                                                                              tion of the plant is scheduled for      power plant in 1996.
        260 large blocks are manufactured        FSO, ordered by TotalFinaElf in                                                                                                                                                    dling 300,000 auto parts/year has
                                                                                                                                              November 2003. NPO’s final deci-            This 15-MW project could be the
        and completely assembled in the on-      September 2000, is 300 m long, 62 m                                                                                                                                                been delivered to the No. 1 Assembly
                                                                                              INDUSTRIAL PLANT & ENGINEERING                  sion to select Hyundai as an EPC        cornerstone for Hyundai to expand
        land yard, the assembled FSO is          wide, 32 m deep, and triple the size
                                                                                                                                              contactor resulted from Hyundai’s       its diesel power business in Israel as
        shipped onto a barge by skidding,        of a soccer pitch, with living quarters
        then moved out to the open sea.          that can accommodate 130 crew              Pressure Vessel Shipped                           reputation and capabilities, proven     well as adjacent Arabic countries.
        Finally, the main FSO is launched out    members at the same time. It will be          The Industrial Plant & Engineering
        by submerging the barge.                 installed in the Amenam oil field in       Division delivered a large pressure
            Offshore industries have shown       the 61-m-deep sea 35 km off the
        keen interest in this method, which      eastern coast of Nigeria. The                                                                INDUSTRIAL PLANT & ENGINEERING          trial mechanical presses.
        can reduce construction costs and        Offshore & Engineering Division will                                                                                                     Presses are a kind of machine tool
        improve delivery time, since it does     sail out the FSO at the end of October                                                     Three Container Cranes for Hong Kong      which exert pressure on materials
        not require digging a dry dock to        and complete the site installation by                                                          The Industrial Plant & Engineering    placed between the upper and lower
        build vessel-type offshore structures.   February of 2003.                                                                          Division received a $16.5-million order   molds for the drawing process, etc. The
                                                                                                                                            from Hutchison Port Holdings of Hong      quality of the finished product depends       Shop of the “World Car” Line at
                                                                                                                                            Kong for three large container cranes.    greatly on the motion and speed of the        Hyundai Motor Company in Ulsan. The
                                                                                                                                                Able to load up to 40 containers      press tool. Therefore, it is vital that the   system, specially designed by the
      shop. The objective of the workshop        nized since April of 2001. Workshop                                                        per hour, the 18-row super post-pana-     operating part be optimally designed.         Engine & Machinery Division, consists
      was to increase productivity through       agendas included safety awareness,         vessel to BPC of Iran as part of the            max cranes can load and unload large          The previous design method relied         of package supply for the conveyor
                                                 environmental protection and health        Aromatic Project.                               containerships of over 32 meters in the                                                 line. The system has adopted the lifter
                                                 awareness.                                     The 115-m pressure vessel is the            beam without having to move the con-                                                    inside of the platform so that the
                                                                                            largest structure ever completed by             tainership.                                                                             height of the conveyor can be adjusted
                                                                                            HHI and is the last of the five pressure            The cranes will be installed around                                                 easily. In order to manufacture con-
                                                         OFFSHORE & ENGINEERING             vessels ordered. Four other pressure            the end of July 2003.                                                                   veyors that impose the smallest possi-
                                                                                            vessels have already been shipped at                                                                                                    ble impact on noise level, the belt type
                                                 New Preheating Welding Machine             the beginning of July.                                                                                                                  drop lifter has been replaced with the
                                                     The Offshore & Engineering                 These pressure vessels will be                       ENGINE & MACHINERY                                                             chain type.
                                                 Division, in its long term collaboration   installed in the Persian Bay off the                                                                                                        The division’s successful completion
                                                 with its business partner that special-    southern coast of Iran. Beginning next
                                                                                                                                            Optimal Design Program Developed                                                        of the conveyor system backed by their
      efficient communication among those        izes in heat control, developed a new      year, they will produce about 3.2 mil-              The Engine & Machinery Division       on designers’ experience, design data         unique technology and reliability will
      involved in the project.                   welding equipment called Inconel           lion tons of chemical products, such as         developed an optimal design program       of the similar models and trial-and-          pave the road to expand its business in
          Safety Workshops have been orga-       Infrared Ray Heater that can generate      benzene and LPG.                                for the link mechanism used in indus-     error method by gradually altering the        overseas markets.


12 New Horizons                                                                                                                                                                                                                                            September-October 13
       HHI Roundup                                                                                                                 People

                                  CONSTRUCTION EQUIPMENT                                 Okcheon substation to Korea Train        Executive Vice President of Engine & Machinery Division
                                                                                         Express (KTE).                           Cho Byung-sang

       Two New Models Released                                                                                                    Looking Beyond Today
           The Construction                                                                    ELECTRO ELECTRIC SYSTEMS

       Equipment Division recently
       released a low-noise, low-
                                                                                         Transformers for ATCO
                                                                                                                                                                                                    By Monica Sohn
       emission, and environmental-                                                          The Electro Electric Systems
       ly friendly forklift, which has                                                   Division has completed and shipped

                                                                                                                                  F
                                                                                                                                            or Cho Byung-sang, executive vice president of          management phi-
       improved fuel efficiency and                                                      three transformers which were                      HHI’s Engine & Machinery Division, management           losophy; becoming
       maneuverability, in two mod-                                                      ordered from ATCO Power and Ontario                philosophy is something like looking outward from       a person who can
       els, the 3.5-ton class HDF35III                                                   Power of Canada.                         a crow’s nest. High above the decks of the ship, you are          pass on to others
       and the 4.5-ton class                                                                 These transformers, one 280 MVA      forced to keep your attention fixed on the ocean ahead.           what he has
       HDF45III.                                                                         and two 225MVAs, were completed          Likewise, EVP Cho has always kept long-term profits in            learned. “When                     Cho plans to
           These forklifts have 92-hp                                                    after 10 months since October 2001       sight and he is justifiably proud of the achievements that        you have the abili-
       engines, and their fuel effi-                                                     and are scheduled to be installed at                                                                                                         work towards
                                                                                                                                  have resulted from doing so. “I’ve tried to emphasize a           ty, it is important
       ciency has been upgraded 10%.           forward and backward without sud-         the Brighton Beach Power Plant.          middle-to-long term management style,” says Cho. “Some-           to be a person who             achieving complete
           Also, specially designed trans-     den shocks, thereby optimizing the            ATCO Power, a Canadian electric      times this may mean short-term losses, but I still believe        can pass it on to
       mission minimizes the noise and         equipment’s performance.                  company which owns Brighton Beach        this is the type of manager I will be.”                           others,” he states.           independence in the
       heat emitted during operation, and           With the release of the new mod-     Power Plant, had previously awarded          During a short period in the Electro Electric Systems              Now that Cho
       the acceleration has been improved.     els, the division is expected to con-     HHI an order for two 90 MVA trans-                                                                                                           design sector.
                                                                                                                                  Division, Cho emphasized establishing a strong A/S system         has taken charge of
       The internal mechanisms of the          centrate on expanding sales of fork-      formers for a substation in Alberta on   and a management information/computer system. In the              the Engine &
       clutch have been adapted to move        lifts in the domestic market.             September 2000.                          production area, he emphasized five-points: tidiness, orga-       Machinery
                                                                                                                                  nization, cleanliness, sanitation, and livelihood. “I’m confi-    Division, he plans
                                                                                                                                  dent achieving these ends will help the division grow,” says      to utilize the abilities he has acquired during his long
                                                                                                CONSTRUCTION EQUIPMENT            Cho.                                                              career. He feels the division has done very well and has
            ELECTRO ELECTRIC SYSTEMS                                                                                                  The vision needed to pursue such long-term goals came         grown to become a major player in the world marine engine
                                               Iran including AAL, is expected to earn   Exemplary Employees from China           from Cho’s experience in a wide range of projects in the          industry, with a 35% share of the global market. But he
                                               additional royalties from those compa-
     First Royalty Through SIV Technology      nies during the years ahead and now is       The Construction Equipment
                                                                                                                                  Industrial Plant & Engineering Division, including plan-          feels much needs to be done to maintain this leading posi-
     Transfer                                  working on a new contract with a          Division invited local exemplary
                                                                                                                                  ning, quality control, project management and sales. In fact,     tion. “It’s much like looking after your health while you are
                                                                                                                                  during Cho’s 30 years at HHI, there are only a few divi-          healthy,” says Cho.
         The Electro Electric Systems          Taiwanese company.                        employees from the Changzhou Office,
                                                                                                                                  sions in which he has not had experience. Cho was among                First Cho plans to implement the same type of five-
     Division has earned its first royalty                                               China to HHI’s head office in Ulsan.
                                                                                                                                  the first group of recruits at HHI in 1972, and spent his first   point movement program that he emphasized in the Electro
     from a technology transfer agreement                                                   After visiting HHI’s shipyard and
                                                                                                                                  eight years handling quality control and production in the        Electric Systems Division. He says engines need to be melt-
     with a foreign company since its foun-          ELECTRO ELECTRIC SYSTEMS            manufacturing facilities of the
                                                                                                                                  design and production department at the fledgling shipyard        ed, molded, sculptured and handled with care. While the
     dation in 1973.                                                                     Construction Equipment Shop, the
         The division made a contract for      Four Transformers for KEPCO               employees had a chance to learn
                                                                                                                                  of the Shipbuilding Division. He then moved on to the             engines may weigh several hundred tons each, they demand
                                                                                                                                  Industrial Plant & Engineering Division and spent the next        precision care. So, the five-point program, combined with
     SIV (Static Inverter) technology trans-      The Electro Electric Systems           about the various operation of each of
                                                                                                                                  20 years moving from one department to another, honing            care for the product could be just what is needed in his
     fer with AAL (Autometers Alliance         Division completed the transformers       the division’s sectors.
                                                                                                                                  his business skills in all areas. His long and varied experi-     view.
     Ltd.), India in 1998 and has recently     ordered by Korean Electric Power             The employees are local Chinese
                                                                                                                                  ence includes project planning, quality control, outsourcing           Second, Cho plans to work towards achieving complete
     received $52,000 in royalties from this   Corporation (KEPCO) for the Shin-ga-      who have worked for many years at
                                                                                                                                  production and management, and project management. He             independence in the design sector. HHI is the world’s
     company which had supplied 76 units       pyung transformer station.                the Changzhou office. They were
                                                                                                                                  became a director in 1986 and then moved over to the              leader in the hardware area of ship engines, but is not so in
     of 30kVA & 210kVA SIVs to Indian             Out of 18 transformers ordered by      praised for their good record in sales
                                                                                                                                  Electro Electric Systems Division in July of 2000 before          the area of engine design. While the company has devel-
     Railways, a government-owned enter-       KEPCO, 12 transformers of type            and production activities.
                                                                                                                                  becoming executive vice president overseeing the Engine &         oped its own engine brand, HiMSEN, Cho feels there is
     prise.                                    333MVA have been completed and the
                                                                                                                                  Machinery Division.                                               much work to be done to upgrade its quality.
         The Electro Electric Systems          remaining six will be shipped by the
                                                                                                                                      Despite a long and successful career in the Industrial             Lastly, he hopes to create a working atmosphere that pro-
     Division’s earnings through this tech-    end of October.
                                                                                                                                  Plant & Engineering Division, it is a testament to Cho’s for-     motes cooperation in identifying problems and their solutions.
     nology transfer are expected to grow         The division also delivered a Gas-
                                                                                                                                  ward-looking philosophy that he wishes he could have done              These plans for the division are a part of Cho’s vision
     after the increase of AAL’s sales vol-    Insulated Bus (GIB) for Uljin nuclear
                                                                                                                                  more. “I sometimes feel if I had been more aggressive and         that sees short-term goals being met while long-term objec-
     ume in the Indian market.                 power plant, 11 sets of the Gas-
                                                                                                                                  better at my job, the division could have become even been        tives are held firmly in view.
         The division, which currently pro-    Insulated Switchgears (GIS) for the
                                                                                                                                  better than it is today,” says Cho.
     vides various technologies to four dif-   Namgwangju substation to KEPCO and
                                                                                                                                      This thinking reveals the other cornerstone of Cho’s          The writer is a journalist based in Seoul.
     ferent overseas corporations in India &   120MVA & 5 MVA transformers for the


14 New Horizons                                                                                                                                                                                                                                   September-October 15
                  International Supervisors at HHI
                                                                                                                 Helping neighbors in need service    A friendly soccer match between          Fun time at the ski resort
                                                                                                                 campaign (making kimchi)             supervisors and HHI employees

                       HI is an integrated heavy industries company build-
                  H    ing ships, offshore facilities, engines, electronic sys-
                  tems, construction equipment, and more.                             supervisors live in Ulsan totaling about 1,000 including
                                                                                                                                                                                 3
                    Since most of each division’s main clients are overseas           their families.
                  businesses, foreign supervisors are dispatched to HHI to               Not only does HHI manage an international housing
                  inspect the quality of ordered products. About 600 of these         complex, but also provides various supplemental facilities
                                                                                      including an elementary school.
                                                                                         Speaking a multitude of languages and adjusting to




                  Photo Essay
                                                                                      unfamiliar life in Korea, these supervisors don’t lose their




                                                                                                                                                 Year-end farewell party
                                                                                                                                                 Entrance to Foreigners
                                                                                                                                                 Compound
                                                                                                                                                 Clubhouse
                                                                                                                                                 Foreigners Compound Football
                                                                                                                                                 Club (FCFC)
                                                                                                                                                                                          8
                                                                                                                                                 Supervisor examining the sea
                                                                                                                                                 trial
                                                                                                                                                 World Cup rooters
                                                                                                                                                 Supervisor on task on the ship
                                                                                                                                                 At the Clubhouse after work
                                                                                                                                                 Hyundai Foreign School students
                                                                                                                                                 touring shipyard



                                                                                                                                  4                                                       9




                           1                                                                        5                                     6                                             7 10




                                                                                  2
                                                                                      smiles or their healthy appear-
                                                                                      ance, regarding any difficulties of                            11
                                                                                      foreign life or cultural exchanges
                                                                                      among themselves as an oppor-
                                                                                      tunity to learn.

16 New Horizons                                                                                                                                                                                      September-October 17
                                                                                                                                            Viewpoint


                      Photo Essay                                                                     Industry History


                                                                                                     Rising to New Challenges
                  1                                                                                          ooking back into the history of the        overtaken Japan and European shipyards.


                              One might say that diversity
                                                                                                     L       world’s shipbuilding industry, it
                                                                                                             becomes apparent that the center has
                                                                                                     always moved toward the “cheaper” coun-
                                                                                                                                                            The one market which has remained in
                                                                                                                                                        Europe is cruise vessels, although this market
                                                                                                                                                        was drastically affected by September 11th
                           means providing motivation to see                                         tries. Back in the sixties, the traditional        and has only recently seen a recovery. The
                           and feel many different things.                                           Scottish and English shipbuilding industries       majority of the world’s largest and latest
                                                                                                     lost a large chunk of their market to Sweden       cruise vessels are built by approximately five
                           Living in Korea helps these foreign-
                                                                                                     and then, almost immediately, to Japan, as         yards in Germany, France, Finland and Italy,
                  2        ers understand the country, if even                                       that nation developed large shipbuilding yards     although Japan and Korea are both looking
                           just a little. Also, these citizens of                                    to suit the developments of the sixties and        eagerly at this market niche.
                                                                                                     seventies. Japan was then challenged and               One of the newer developments in the
                           many nations give Koreans a              7
                                                                                                     then overtaken by Korea, which, during the         shipbuilding industry has been that of propul-
                           chance to share friendships that                                          seventies and eighties developed even larger       sion systems, especially in the cruise vessel
                           transcend nationality.                                                    yards to cope with demand, especially from         market where podded drives are now com-
                              At a time of globalization and                                         the large tanker and bulk carrier sectors.         mon. One of the largest projects now under-
                                                                                                         The latest country to enter the interna-       way is Cunard’s Queen Mary 2 project in
                  3
                           growing chances to meet people
                                                                                                     tional market in an impressive way is main-        France, where podded drives are part of the             By Alan Thorpe
                           from abroad, Koreans can discover                                         land China, where yards were already in exis-      design. Podded drives have had their prob-
                           the diversity of their neighbors                                          tence, but catering for domestic demand.           lems when first introduced, however, the
                           already living among them.                                                During the late nineties and into the current      more they are included in new designs of
                                                                                                     decade, Chinese yards have turned more and         cruise vessels, the higher level of efficiency
                                                                    8                                more to the international market for orders.       they achieve.
                                                                                                     However, the development of the Chinese                As another method by which the yards in
                                                                                                     shipbuilding industry, plagued with infrastruc-    Korea have managed to stave off the threat
                  4                                                                                  ture problems and a lack of experience and         from mainland China is by introducing effec-
                                                                                                     quality suited for the international market,       tive productivity programs to reduce the cost
                                                                                                     has not been as dramatic as was first              of the final product. In the case of VLCCs, the
                                                                                                     thought.                                           newbuilding price is now down to near the
                                                                                                         To compete with this possible develop-         $60-mil. level compared with a few years ago
                                                                                                     ment within the Chinese shipbuilding indus-        when over $100 mil. was the norm. This
                                                                                                     try, Korean yards turned their attention to a      requirement for a more cost effective method
                                                                                                     more sophisticated market as well as main-         has been passed on to the equipment and
                  5                                                 9                                taining their interest in the ‘series’ building    service suppliers, who have worked with the
                                                                                                     programs for tankers and bulk carriers. The        yards to reduce price levels.
                       6
                                                                                                     sophisticated market started with the higher           One question has been on most people’s
                                                                                                     end of the fast post-panamax containerships        minds over the past few years-where will it
                                                                        Best dresser nomination      and offshore ships and structures, and has         go from here? Times past have seen the cen-
                                                                        ceremony
                                                                                                     developed to an even more sophisticated            ter of the world’s shipbuilding expertise shift
                                                                        Hyundai Foreign School
                                                                        Volunteers at the bazaar     level, that of gas carriers, especially the very   from Scotland to Sweden to Japan and now
                                                                        Hyundai Foreign School       large LNG carriers.                                Korea. However, it is unlikely that we will see
                                                                        dance performance                The Moss Rosenburg (Norwegian) and             another nation enter the international scene
                                                                        Festival at the Foreigners   GTG (France) liquefied gas containment sys-        on the scale as was seen when Japan and
                                                                        Compound
                                                                                                     tems have had license agreements in Korea          Korea entered. China is obviously going to be
                                                                                                     for a number of years, but it has only been        a major “player”, but will not soon take over
                                                                                                     over the past few years that Korea has             from the giants in Japan and Korea. Thus, it
                                                                                                     entered this market effectively with orders        looks as if the center will remain in the Far
                                                                                                     arriving from many shipowners in this trade.       East for the time being.
                                                                                                     It would be correct to say that Korea is now
                                                                                                     the largest ‘player’ in this market, having        The writer is a journalist based in the UK.
18 New Horizons                                                                                                                                                                                           September-October 2002 19
     IR News
        Sales Strong                                                                                                                                                  and a 29.6% increase year on year. The           ago, the first time that the percentage       • Amount of acquisition (KW)

        Despite                                                                                                                                                       division expects that recovery of the
                                                                                                                                                                      domestic construction market will further
                                                                                                                                                                      increase earning profit. Other divisions
                                                                                                                                                                                                                       rose higher than 10% since its listing on
                                                                                                                                                                                                                       the Korea Stock Exchange in 1999.
                                                                                                                                                                                                                                                                       - Number of stocks: 20,000,000
                                                                                                                                                                                                                                                                         (100%)
                                                                                                                                                                                                                                                                     • Affiliate group: Hyundai Heavy

        Weak Dollar                                                                                                                                                   followed, including Engine & Machinery
                                                                                                                                                                      at $323.7 million, Electro Electric
                                                                                                                                                                      Systems at $300 million, and Industrial          Public Notice
                                                                                                                                                                                                                                                                       Industries Co., Ltd.
                                                                                                                                                                                                                                                                     • Number of affiliates
                                                                                                                                                                                                                                                                       - Before change: 5
                                                                                                                                                                      Plant & Engineering at $137.4 million.                                                           - After change: 6
                                                                                                                                                                          Recognized for engineering technolo-         Affiliation of Samho Heavy Industries         • Total assets of affiliates
                                                                                                                                                                      gy and proven reliability, transformers          (July 02, 2002)                                 - Before change: 10,323,304,000,000
        First Half Sales of                    3.8          by increasing Euro-dominated contracts.                  Due to the decline in the world ship-            developed by Electro Electric Systems            • Company: Samho Heavy Industries               - After change: 11,894,127,000,000
                                                                                                                 building industry and shipowners’ wait-              have been actively exported to the                 Co., Ltd.
        Trillion                                                                                                 and-see attitude, newbuilding demand                 American market.
             HHI’s first-half sales in 2002 were            July 2002 Business                                   was a bit slow during the first-half of the              As of the end of July, HHI secured
            3.798 trillion, an increase of approxi-                                                              year. However, by securing contracts for             $9.1 billion in backlog orders, which is
        mately 270 billion, or 7.7% growth
                                                            Performance                                          both moss-type and membrane-type LNG                 enough for two years’ worth of work.                                         Sales Performance by Division
        year on year. Operating profit came to                      HHI’s sales came to 4.351 trillion           carriers, HHI has enhanced its flexibility                                                                                                                                       (unit:   billion)

            291.2 billion for the period and net               by the end of July, an 11% increase year          in the world newbuilding market for LNG                                                                                                             2002          As of         Percentage of
        income reached 103.4 billion.                          on year. A look at the performance of each        carriers. HHI and EnerSea of the US will                                                                                                           Target      June 30, 2002   Annual Target (%)
             HHI’s operating profit decreased by               business division shows that Shipbuilding         work together to develop and market a                HHI’s Stock Price                                                        Shipbuilding         3,788          1,889               49.9
        6.3% and income before income taxes                    took almost 50% of all sales with 2.161           new Compressed Natural Gas (CNG) car-                                                                                         Offshore &
                                                                                                                                                                          Stock Price Indexes                                                                       1,500            537               35.8
        decreased by 14.5%. The drop was due to                trillion and other divisions followed,            rier by end of this year. Furthermore, it                                                                                     Engineering
        the donation of 22.5 billion in funds to               including Offshore & Engineering with             plans to continuously concentrate on                                                                         As of June       Industrial Plant &
        Hyundai Asan during the disaffiliation                    654 billion, Engine & Machinery with           receiving orders of high value-added spe-                                         2000             2001                                            1,010            321               31.8
                                                                                                                                                                                                                                 2002          Engineering
        process in February and the depreciation                  339 billion and Electro Electric Systems       cial ships including FPSOs.                                            High ( )   44,700       32,000          37,700         Engine &
        of the US dollar. With the current state of            with 498 billion.                                     Offshore & Engineering has received               Stock Prices                                                                                   700            290               41.4
                                                                                                                                                                                        Low ( )    15,650       18,300          22,250         Machinery
        foreign currency markets, operating prof-                   New orders came to $2.7 billion.             $300 million in orders, a considerable
                                                                                                                                                                       Market Capital                                                          Electro Electric
        it is likely to decrease. However, it is               Shipbuilding made up $1.28 billion of             decrease from last year. However, with                                             1,406           1,923        1,854
                                                                                                                                                                                                                                               Systems
                                                                                                                                                                                                                                                                      880            446               50.7
                                                                                                                                                                       ( billion)
        expected that the targeted sales of 8.4                that, receiving orders for 35 vessels,            large-scale projects expected in the latter
                                                                                                                                                                       Foreign Ownership (%)         3.55            6.28        10.52         Construction
        trillion and operating profit of 700 bil-              including 13 containerships, six bulk car-        half of the year, the division is expected                                                                                                           480            256               53.3
                                                                                                                                                                       PER (H/L)                   7.6/2.7      7.5/4.3           N/A          Equipment
        lion will be reached. To prevent losses                riers, six tankers, eight product carriers,       to meet its annual target of $1.8 billion.
                                                                                                                                                                       EV/EBITDA                      4.9             5.6         N/A          Others                 100             60               60.0
        from depreciation of the US dollar, HHI                and two special vessels. New orders               Construction Equipment totaled $328.5
                                                                                                                                                                       EPS ( )                      5,851           4,263         N/A          Total                8,458          3,799               44.9
        plans to diversify its settlement currency             increased 8.2% year on year.                      million in orders, 108.1% over its target

            Income Statement Summary
                                                                   (unit:    billion)
                                                                                                                                                                          The trend of falling stock prices since
                                                                                           Balance Sheet Summary                                                      April has continued in June due to
                                     2001 1H (A)     2002 1H (B)    Change (B-A)                                                                 (unit:    billion)
                                                                                                                                                                      impacts from the slump in the US stock                  For more information, please contact HHI’s IR Department
          Sales                        3,527           3,799            272                                           As of Dec. 31, As of June 30,       Change
                                                                                                                                                                      market and the depreciation of the US                   Seoul Office
          Cost of Sales                2,927           3,233                306                                         2001 (A)        2002 (B)           (B-A)      dollar. The KOSPI had fallen 53.68                             Tel: (82-2) 746-4570, 4555, 4541, 4728, 7454
          Gross Profit                   600             566                -34          Current Assets                  3,400           3,478               78
                                                                                                                                                                      points from a month earlier to close at                 General Manager: Moon Jong-bak             jbmoon7@hhi.co.kr
          Selling & Administrative                                                       Fixed Assets                     5,657          5,713               56
                                         289             275                -14                                                                                       742.72 at the end of June. Despite such                 Senior Manager:      Cho Young-cheul       choyc@hhi.co.kr
          Expenses                                                                       Total Assets                     9,057          9,191             134        unfavorable circumstances, HHI’s stock                                       Kim Bum-joon          bjdream@hhi.co.kr
          Operating Income               311             291                -20          Current Liabilities              4,430          4,845             415        price rose to 25,150 at the end of June,                                     Son Sung-min          smson@hhi.co.kr
          Nonoperating Income            190             194                 4           Fixed Liabilities                1,795          1,504             -291       a 7.16% rise from 23,350 a month
          Nonoperating Expenses          311             323                12           Total Liabilities                6,224          6,348             124        before on the back of foreign investors’                Ulsan Head Office
          Ordinary Income                190             162                -28          Total Shareholders’ Equity       2,832          2,842               10       buying spree. On the strength of this, the                    Tel: (82-52) 230-3899
          Income Taxes                    66              59                 -7          Total Liabilities &                                                          foreign investors’ equity ratio for HHI                 General Manager: Choi Kyung-young              choiky@hhi.co.kr
                                                                                                                          9,056          9,190             134
          Net Income                     124             103                -21          Shareholders’ Equity                                                         also rose to 10.52% from 8.21% a month




20 New Horizons                                                                                                                                                                                                                                                                             September-October 2002 21
           Technology                                                                                                                               Korean
                                                                                                                                                    Panorama


       Engine Control System for Medium Speed Diesel Engine
                                                           The base module is flexible for I/O           turbocharger speed, pressure and
         Description
                                                      point required in the engine. It is also easi-
                                                      er to manage and repair because each I/O
                                                                                                         temperature.
                                                                                                       • Function of the each information, the
                                                                                                                                                               Traditional Korean Medicine
                                                      module is comprised of a slot type card.           running history and setting up the
                                                           Using fast, 32 bit, microprocessors in
                                                      the base module and safety module, the-
                                                      control action is accomplished swiftly
                                                                                                         running parameter
                                                                                                       • Ease of maintenance due to the one
                                                                                                         body system
                                                                                                                                                               Sasang Constitutional
                                                                                                                                                               Medicine
                                                      and accurately.                                  • The back plane is structured such that
                                                           Furthermore, this control hardware            input/output modules cannot be inserted
            As the need to protect the earth’s        system is designed to endure adverse               incorrectly. (Patent pending)
        environment increases, engine electronic      conditions such as high/low tempera-             • Because input/output module cards
        control systems must be developed offer-      tures, humidity and vibration.                     were made separately, each card can be
        ing both higher fuel efficiency and                The diesel engine control system is           applied regardless of the engine types
        reduced toxic exhaust gases. In addition,     listed on the world's largest e-marketplace        I/O cards are interchangeable regardless
        users require a range of additional fea-      technology transfer - www.yet2.com.                 of engine type.
        tures including more reliable response,            Now, the diesel engine control sys-         • Input and output can be easily changed
        higher efficiency, security of indoor         tem can be applied to the HiMSEN                   using the PC based database
        space, the reduction of running resis-        (Hyundai Intelligent Medium Speed                • Algorithm assuring reliable engine
        tance, and so forth. To satisfy these         Engine) and the PPS (Power Packaged                control
        needs, it is necessary that an engine con-    Station) developed by Hyundai Heavy              • Communication control is designed
        troller be developed for controlling preci-   Industries.                                        according to the industrial
        sion engine freely.                                                                              standardization protocol
            The Engine Control System functions                                                        • Applied design technologies by each
        as the control unit of the engine for gen-    Benefits summary                                   module processor
        erators used on land and on vessels. This         Listed below are the engine control          • Tested for EMC/EMI
        system is used for running the engine and     system’s characteristics and advantages          • High speed microprocessor provides
        for observation. After receiving signals      in using the electronic controller;                Improved accuracy in measurement.
        from temperature sensors, pressure sen-                                                        • Applying the protocol to prevent error
        sors and protector switches the engine        Advantages of the electronic engine              • Utilizes HMI graphic development
        starts. When the engine runs into danger,     controller:                                        environment                                                                               By Benjamin Lee
        the controller stops the engine. The status   • The engine can be maintained through           • Implementation
        of the running engine constantly moni-          normal use without the need for                  of each driving                                       Why are the remedies of some long-forgotten
        tored to ensure that the engine runs safe-      driver’s management and repair.                  and control
        ly. All control signal and status signal      • Precise measurement of the engines               screen                                                19th century Korean-considered insane in his
        data are sent to the monitor PC in the          load, status, and characteristics              • Alarm/Trend
        main engine control room. This system           provides optimum control and                     constituent and                                       day-suddenly gaining such popularity in the
        exerts control over the complete engine.        enhanced performance.                            management
            Figure 2 shows the operation module       • Remote control and monitoring allows                                                                   new millennium? Because they seem to work!
        of the engine control system.                   for automatic operations.
            Figure 3 shows the base module. The       • Prolonged engine life and easier                                                                       More than 100 years since his death, Ie Che-
        dual system, base module and safety             management.
        module of the developed electronic con-                                                                                                                ma and his prescriptions are all the rage in
        trol system satisfies the requirements of     Main characteristics of the electronic
        the ship’s classification society.            engine controller:                                                                                       Korea today.
            The separated engine control panel        • Refined appearance and easy operation
        enables various engine control statuses to      with large LCD
        be displayed on the LCD screen.               • Digital display of engine speed,


22 New Horizons                                                                                                                                                                                    September-October 2002 23
      Korean
      Panorama




       S
               ome believe it is superstition.        Internet rules the world, the SCM mira-     four constitutions have their own symp-
               Others think it is a mystery. But      cle is a phenomenon that cannot be          toms and treatments. In treatment, con-
               most people agree that it is an        explained by science. As the human          trol of the mind, or moderation, plays an    a doctor, and wrote several books              lems. Even mental diseases are passed         effects on different people. This is
       effective system for preventing and cur-       race advances forward with modern sci-      important role. SCM emphasizes the           including “Chunyucho,” or Some                 from older generations to younger gen-        because of different organic reactions by
       ing human diseases.                            ence and technology, it becomes even        cultivation of mind and body.                Revelation, “Chejungshinpyun,” or New          erations, supporting the genetic theory.      different bodies that have different con-
           A traditional Korean medicine              more apparent that there are some               Ie Che-ma was born in 1837, during       Compilation for Relieving People,                  Secondly, SCM places a great              stitutional types. In Western medicine,
       called Sasang Constitutional Medicine          things in life that go beyond reason and    the reign of King Hunjong, Chosun            “Kwangjesul,” or Discourse on General          emphasis on the human mind as well as         allergies offer a good example of indi-
       (SCM) is spreading like wildfire across        logic.                                      Dynasty, in Hamheung in northern             Health Maintenance, “Gyugchigo,” or            the body. Instead of treating patents         vidual differences resulting in different
       the country and offering new hope for              SCM is a medical practice unique to     Korea. During his life of 64 years, he       Draft on Inquiring the Properties of           based on their visible symptoms, SCM          conditions. Some people are allergic to
       those who suffer from diseases. A              Korea. It was formulated by Ie Che-ma       suffered from many diseases. It was          Things, and “Tongisusebowon,” or               treats patients by looking into their inner   various plants or animals, while others
       recent hit television drama called Ie          in 1884 and was first described in his      through his personal illness that he dis-    Longevity and Life Preservation in             worlds. It assumes that mind and body         have no problems with them.
       Che-ma, which describes the life of the        renowned book “Tong-isusebowon.”            covered SCM. After having been treated       Oriental Medicine.                             work together to form one’s constitu-             In determining one’s constitutional
       discoverer of the medicine, fanned the         Simply speaking, SCM classifies human       using traditional medicine without suc-          Ie’s introduction of SCM incorporat-       tion. Without a mind, human beings are        type, many methods are used. The first
       flames of popularity for SCM. Starring         beings into four types and offers med-      cess, he came to realize that each indi-     ed philosophy, pathology and treatment.        no different than any animals on Earth.       method is to examine one’s look or
       popular actor, Choi Soo-jong, Ie Che-          ications according to their types, or       vidual’s constitution is unique and that     When he died at the age of 64, his final       The mind is not just a part of the human      appearance. The Taeyang-in tends to
       ma shows viewers the wonderful world           constitutions. SCM explains the func-       the symptoms and treatment of diseases       words were: “One hundred years after I         body, but an equal partner to the body,       have a distinctive physique, a relatively
                           of this medicine and       tion and size of organs, whose functions    depend on the individual’s constitution-     die, SCM will dominate the world.”             playing an equally important role in          large head and a thick neck. The upper
                                    its miracu-       and health are directly affected by         al characteristics. Thereafter, Ie devoted       SCM has several unique features.           health and illness. In Western medicine,      body is usually well developed, while
                                       lous           nature and the emotions: sorrow, anger,     his life to researching the constitutional   The basic theory of SCM is that genes          the importance of the mind has also been      the legs are shorter. The person some-
                                         effects.     joy and pleasure.                           types and after a long period of hard        determine one’s constitution. By looking       recognized since the 20th century. But in     times appears unstable while standing
                                         In this          These feelings underlie the four dif-   work, he finally succeeded. But people       at parents’ and ancestors’ physical char-      SCM, the importance was realized much         because of this apparently underdevel-
                                         21st         ferent types of human constitution. The     during his time rejected him, believing      acteristics, one can predict the constitu-     earlier in the 19th century. That is just     oped lower body. Standing for a long
                                         century      Taeyang-in, or “great Yang person,”         his medicine was nothing but fantasy         tions of their offspring. This is illustrat-   another sign that Ie was not merely an        time can be difficult for them. The
                                         when         tends to have large lungs and a small       created by an insane person.                 ed by the fact that children’s blood types     intelligent physician, but a true genius.     Soyang-in person, on the other hand, has
                                         satellites   liver. Taeum-in, or “great Yin person,”         According to research by many            match their parent’s types. If one’s par-          The third element of SCM is its con-      a broad chest and thin hips. Because of
                                          fill the    has a large liver and small lungs.          scholars, at the age of 30, Ie read          ents suffered from strokes or high blood       stitutional nature. According to SCM,         brisk legs, they tend to walk and run
                                             skies    Soyang-in, or “small Yang person,” has      “Myungsunrok” which was written by           pressure, that person has a greater            each person needs different treatment         lightly. Taeum-in people are tall and
                                              and     a large spleen and small kidneys.           Han Suk-Chi. Ie was inspired by Han’s        chance of having the same conditions.          and medication depending upon his or          have strong physiques. Despite strong
                                               the    Soeum-in, or “small Yin person,” has        thoughts and decided to systemize his        Those with digestive problems tend to          her personal constitution. Different          bone structure, their necks are weak, and
       Portrait of Ie Che-ma                          large kidneys and a small spleen. These     theories. Ie was a philosopher as well as    have parents who had the same prob-            drugs and medications have different          some are overweight. But with a steady


24 New Horizons                                                                                                                                                                                                                                                  September-October 2002 25
      Korean
      Panorama

                                                                                                                                                                   Overseas Network

                                                                                                                                                   NORTH AMERICA
                                                                                                                                                   US                             GREECE
                                                                                                                                                   New Jersey                     Piraeus
                                                                                                                                                   Tel: 1-201-816-4080~1          Tel: 30-1-428-2992~3
                                                                                                                                                   Fax: 1-201-816-4083            Fax: 30-1-428-2144
                                                                                                      Currently popular KBS-TV broadcast
                                                                                                      drama, ‘Ie Che-ma’                           Houston                        BULGARIA                       ASIA
                                                                                                                                                   Tel: 1-281-578-7097            Sofia
                                                                                                                                                   Fax: 1-281-578-8317/7330
                                                                                                                                                                                  Tel: 359-2-381-068/382-937/
                                                                                                                                                                                                                 JAPAN
                                                                                                                                                                                  Tel: 359-2-381-068/382-937/
                                                                                                                                                                                       383-105                   Tokyo
                                                                                                                                                                                       383-105
                                                                                                                                                   Chicago                        Fax: 359-2-936-0742/0305       Tel: 81-3-3211-4799
                                                                                                                                                                                  Fax: 359-2-936-0742/0305
                                                                                                                                                   Tel: 1-847-228-8847/437-3333                                  Fax: 81-3-3211-2093
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                                                                                                                                                                                  UKRAINE
                                                                                                                                                                                  Zaporozhye
                                                                                                                                                                                  Zaporozhye                     CHINA
                                                                                                                                                   Orlando
                                                                                                                                                                                  Tel: 380-612-139-839
                                                                                                                                                                                  Tel: 380-612-139-839           Changzhou
                                                                                                                                                   Tel: 1-407-249-7350
                                                                                                                                                                                  Fax: 380-612-595-368
                                                                                                                                                                                  Fax: 380-612-595-368
                                                                                                                                                   Fax: 1-407-275-4940                                           Tel: 86-519-675-0060/5188/2690,
                                                                                                                                                                                                                 Tel: 86-519-675-0060/5188/2690,
                                                                                                                                                                                                                      86-519-676-7799
                                                                                                                                                                                                                      86-519-676-7799
                                                                                                                                                                                  RUSSIA                         Fax: 86-519-675-5332/5870/0500/1001
                                                                                                                                                                                                                 Fax: 86-519-675-5332/5870/0500/1001
                                                                                                                                                                                  St. Petersburg
       waist, they                                                         tive and outgoing.         beyond their families, they can some-
                                                                                                                                                                                  Tel: 7-812-324-4641
                                                                                                                                                                                  Tel: 7-812-324-4641            Beijing
       can stand                                                           However, they are          times become greedy and selfish.             EUROPE                         Fax: 7-812-324-4642
                                                                                                                                                                                  Fax: 7-812-324-4642            Tel: 86-10-6590-0677~8
       firmly.                                                             quick to anger.            Soeum-in individuals are also calm and                                                                     Fax: 86-10-6590-6532/6554
       The                                                                 Taeyang-in people          soft-spoken. They get along well with        UNITED KINGDOM                 HUNGARY
       Soeum-in                                                            always want to move        others and pay attention to details. Their   London                         Budapest                       Hong Kong
                                                                                                                                                   Tel: 44-20-8-741-0501/1531                                    Tel: 852-2586-1291
       is small                                                            forward, allowing no       tender nature helps in their social life.                                   Tel: 36-1-273-3730/3733/3735
                                                                                                                                                                                  Tel: 36-1-273-3730/3733/3735
                                                                                                                                                   Fax: 44-20-8-741-5620/4571     Fax: 36-1-220-6708                  852-2686-1470
       and thin.                                                           retreat. Brave and         They can, however, be mentally unsta-                                       Fax: 36-1-220-6708
                                                                                                                                                                                                                 Fax: 852-3106-5602/5603
       When they walk, they lean forward.               aggressive, these people at times become      ble. They worry too much about small         BELGIUM
       Their chests are rather weak but hips are        loose cannons and don’t know how to           things, and they have too many concerns.     Geel                                                          SINGAPORE
       large. In appearance, Taeum-in and               plan. Soyang-in tend to be firm and per-      Rather individualistic and selfish, they                                    AFRICA                         Singapore
                                                                                                                                                   Tel: 32-14-56-2201
       Soeum-in at times look similar.                  sistent. They act swiftly and firmly, and     don’t try new things. They don’t like to     Fax: 32-14-59-3405                                            Tel: 65-337-2366
                                                                                                                                                                                                                 Fax: 65-337-8966
                              The second element        know how to organize things. They are         take risks. Inward looking and passive,                                     EGYPT
                           in determining overall       good at starting things, but not at finish-   these people often fail to achieve major     NORWAY                         Cairo
                                                                                                                                                   Oslo                           Tel: 20-2-520-0148~9           INDIA
                             constitution is to         ing them. They like to help others, but       things.
                                                                                                                                                   Tel: 47-22-41-0920             Fax: 20-2-754-7528             Mumbai
                                       examine          not their domestic affairs. They are also         Taeyang-ins are healthy when their       Fax: 47-22-42-6671                                            Tel: 91-22-218-0062/9523~5
                                         one’s          easily swayed by emotions and feelings.       digestive system functions properly, but                                    ANGOLA                         Fax: 91-22-218-0061/9522
                                            mental      The Taeum-in person tends to be calm          constipation is bad for them. Soyang-ins,    NETHERLANDS                    Luanda
                                           charac-      and steady. They want to finish what          too, are healthy when their digestion and    Rotterdam                      Tel: 244-2-37 06 92            VIETNAM
                                           teristics.   they started and are good at administra-      evacuation is normal. Taeum-ins are          Tel: 31-10212-1567             Fax: 244-2-33 80 11            Hanoi
                                                                                                                                                   Fax: 31-10212-5134                                            Tel: 84-4-883-3649/3650/3651
                                          Taeyang-      tive work. They cannot stand the idea of      healthy when they perspire well, but
                                                                                                                                                                                                                 Fax: 84-4-883-3648
                                           in peo-      quitting anything in the middle. They         diarrhea is bad for them. Soeum-ins are
                                            ple         want to see the final results. However,       healthy when their digestion is good, but
                                   tend to be           they are too conservative to accept           too much perspiration and diarrhea can                                      MIDDLE EAST
                                  assertive and         changes. Rather than trying to achieve        be bad for them.
                                                                                                                                                                                  UAE
                                 even dictatorial.      things in the outside world, they look
                                                                                                                                                                                  Dubai
                       They are skilled in social       inside to their families. Because they
                                                                                                                                                                                  Tel: 971-4-223-2533
                         life and are very posi-        don’t care much about what is happening       The writer is a journalist based in Seoul.                                  Fax: 971-4-222-0943




26 New Horizons                                                                                                                                                                                                                  September-October 2002 27

				
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