HMM on Thursday unveiled plans to invest more than KRW 15 trillion ($11.3 billion) as part of a growth strategy that includes expanding its container ship fleet capacity from 820,000 twenty-foot equivalent units to 1.2 million TEUs by 2026.
The Seoul, South Korea-headquartered ocean carrier said it plans to diversify its business portfolio to enable it to take a “leap forward to be a global top-rated shipping and logistics company.” It added that the strategy was developed in response to “growing uncertainty arising from ever-changing business circumstances.”
In addition to expanding its container ship fleet, HMM will increase its bulk fleet from 29 vessels to 55 by 2026.
“HMM also plans to secure logistics infrastructure such as terminals in key locations to reinforce its profit structure,” Thursday’s announcement said.
The company said over the next five years it will spend KRW 10 trillion ($7.5 billion) on core assets such as ships, terminals and logistics facilities and KRW 5 trillion ($3.7 billion) on “future strategic projects to diversify HMM’s business.”
HMM announced in May that it achieved record first-quarter earnings, with revenue jumping 103% year over year from KRW 2.4 trillion ($1.8 billion) to KRW 4.9 trillion ($3.7 billion). Operating profit increased threefold from KRW 1 trillion ($790 million) in the first quarter of 2021 to KRW 3.14 trillion ($2.5 billion) this year. And net profit leapt an astounding 20,000%, HMM said, from KRW 154 billion ($116 million) to KRW 3.13 trillion ($2.4 billion).
As part of its environmental strategy, the company will “explore the likelihood of ordering ships using alternative fuels in the future. HMM will also make enterprisewide R&D efforts into the use of carbon-neutral fuels in cooperation with industrial players.”
Other investments include integration of HMM’s inland logistics network into its Hi Quote web sales platform, which was launched in June “to offer a comprehensive contact-fee sales experience featuring instant quotation, booking confirmation and space guarantee.”
HMM said it will invest KRW 150 billion ($113 million) in digitalization to improve its e-platform.
The strategy is in line with the priorities CEO Kyung-bae Kim outlined at the beginning of 2022.
“We need to focus on strengthening our service competitiveness through reinforcing logistics and IT capabilities,” he said. “We also need to concentrate on specifying our medium- to long-term road map based on the development of new business opportunities. Constant efforts will be required to survive the paradigm change and to create a stable revenue stream.”
HMM, the world’s eighth-largest ocean carrier, currently operates more than 100 vessels.
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