South Korea’s Samsung Heavy Industries (SHI) said Tuesday it will launch its first overseas facility somewhere in southeast Asia.
SHI expects to spend about $950 million on the project by 2017, Bloomberg said.
The new plant will most likely be built in southeast Asia but SHI has not chosen a site yet.
Vietnam, Indonesia and Malaysia are currently being considered as possible locations for the new shipyard.
The new plant will allow the company to trim costs by focusing its South Korea shipyard on drilling rig and production vessel construction and moving the production of lower-margin vessels to the new overseas facility.
The new plant will build bulk ships, small container vessels and tankers.
“We want to make room at our shipyard in Korea to focus more on offshore and building higher-value ships,” SHI CFO Chun Tae HeungChun said.
SHI expects plans for the new shipyard to be finalized soon, possibly by the end of year.
The company believes demand for upstream vessels, especially deepwater and harsh environment vessels, will continue to climb.
So far this year SHI has won $5.5 billion in orders, with offshore projects accounting for more than half of those orders.
“We will from now on win offshore projects that are profitable. We have learned from earlier projects to be more cost effective,” Chun said. “