HD Hyundai (267250.KS) is stepping in to support small and medium-sized suppliers struggling with raw material procurement and cost burdens amid the fallout from the Middle East conflict.
According to industry sources on the 9th, HD Hyundai has decided to supply ethylene and paint raw materials—key components for shipbuilding—to help minimize production disruptions and stabilize operations at its partner companies.
The conglomerate plans to preemptively secure major raw materials through its refining and petrochemical affiliates and provide swift support when suppliers face procurement difficulties. For ethylene used in cutting ship steel plates, HD Hyundai has secured 2,000 tons through HD Hyundai Chemical and will begin supplying to partners upon request starting next month. The company is also reviewing plans to supply xylene, a key ingredient for paint, through HD Hyundai Oilbank.
HD Hyundai is also rolling out financial support for its partners. The company plans to support suppliers in shipbuilding, construction equipment, and power equipment sectors through policy financing linkages. The "Export Supply Chain Strengthening Guarantee Program," established earlier this year with 400 billion won ($296 million), is expected to provide practical help for liquidity as it allows partners to access unsecured funding. The first supplier support is expected as early as this month.
Beyond this, HD Hyundai is pursuing mutual growth through the so-called "half-ship project," where it builds vessels jointly with small shipyards, each constructing half of the ship. Half-ship construction is a new collaboration model that increases building flexibility by having different shipyards separately construct the bow and stern sections before joining them together.
HD Hyundai Heavy Industries (329180.KS) formed a task force in March last year for this initiative and began constructing a 157,000 DWT crude oil carrier using the half-ship method. The stern section was built at its Ulsan shipyard while the bow section was manufactured at HSG Sungdong Shipbuilding in Tongyeong. After completing construction at each site, the bow section was transported to Ulsan, and the "rendezvous" operation to join it with the stern was completed on the 6th.
The crude oil carrier completed on that day is scheduled for launching in May and delivery in July. HD Hyundai Heavy Industries is also proceeding with work on a second vessel using the half-ship construction method. Through this approach, the company aims to distribute production volumes concentrated at its Ulsan shipyard to partner companies and establish a more flexible construction system.