The South Korean shipbuilder Daewoo Shipbuilding & Marine Engineering received a purchase order for building of two 318,000-ton very large crude carriers by Singaporean oil and gas shipowner BW Group. According to the agreement the delivery of the two vessels should be done until 2018. The total worth of the order is 179.2 million USD and will give a fresh breath for the finance troubled shipbuilders. BW Group also agreed to pay an advance payment of 30% from the price and the rest according to a plant during construction progress. It is good to be mentioned, that the price for the new VLCC pair is slightly above the market average and will be profitable for the South Korean shipbuilder.
Daewoo Shipbuilding & Marine Engineering is in serious financial crisis, due to low liquidity and constantly reducing cash flows, but this year the company already received 10 orders at total worth of 1 billion USD, which signals for stabilization in the company’s business. South Korean shipbuilders must win orders through their building competitiveness now that their balance sheet no longer can afford to build below the cost.
BW Group is an international maritime group founded in 2003 through a merger of Norwegian shipping group Bergesen and Hong Kong’s World-Wide Shipping. The company has ordered total 63 ships from Daewoo Shipbuilding & Marine Engineering and has received 53 so far, while another 10 are in contruction already. The long-term partnership between the two companies continue during the years and measures in orders for over 4 billion USD.