S Korea's Hyundai Heavy Industries confirms spin-off plans

South Korea's Hyundai Heavy Industries said today it will split its non-shipbuilding businesses into separate companies to improve management efficiency as the country's shipyards undergo massive restructuring.
South Korean shipbuilders including Hyundai Heavy Industries and Daewoo Shipbuilding and Marine have struggled with mounting losses as global demand slows and competition from Chinese rivals intensifies.
The government and creditor banks -- including the state-run Korea Development Bank -- in recent months have urged intense restructuring efforts including mass job cuts.
Under the plan approved at a board meeting today, Hyundai will operate six separate companies to spin off the non-core equipment and construction sectors from its core businesses, including shipbuilding, offshore and industrial plants, the company said in a statement.

Its non-core divisions range from construction equipment, green energy to robotics and account for 13 per cent of sales.
The shipbuilder said the spin-off was part of its restructuring plan submitted to creditors.

"There was inefficiency because our management was centred on shipbuilding and it was difficult for businesses that record smaller sales to secure individual competitiveness," it said.
The nation's so-called "Big Three" shipbuilders including Hyundai, Daewoo and Samsung Heavy Industries racked up collective losses of 8.5 trillion won (USD 7.2 billion) last year.
They were hailed as a major driver of the country's export-reliant economy -- Asia's fourth-largest -- before being forced since last year to shed thousands of jobs and assets to stay afloat.