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Hyundai Heavy Industries sets up engine J/V in Saudi Arabia

Collected: 2017.07.05

Distributed: 2017.07.06

Source: Go Direct

Hyundai Heavy Industries signed a memorandum of understanding with Aramco and Dussur on establishing to produce Himsen diesel engines in Saudi Arabia on Tuesday (local time). [Photo provided by Hyundai Heavy Industries]

South Korea’s Hyundai Heavy Industries (HHI) Co. will set up a joint venture with Saudi Arabia’s state-run oil firm Aramco and industrial developer Dussur to produce engines for vessels and power plants.

HHI said on Wednesday that it signed a memorandum of understanding with Aramco and Dussur on establishing a joint venture that would build an engine production plant worth $400 million by 2019. The plant will be constructed in the King Salman shipbuilding complex in Ras Al-Khair, east coastal region of Saudi Arabia, with capacity of producing nearly 200 engines annually.

The Korean engine and shipbuilder also expects to earn additional profits from the joint venture, such as revenue from loyalty on its engine technology, construction parts and equipments, and technical services. HHI had developed Himsen Engine, for which the joint venture will be paying license fee, in 2008 after 10 years of research and development.

HHI’s Himsen Engine

HHI’s Himsen Engine is medium-sized engine that is used in ships and power plants. It has been sold to nearly 40 countries around the world and commands the largest 22 percent share of the world’s medium-sized engine market.

HHI hopes its investment in the joint venture with Saudi Arabian firms would help to expand its presence in Middle Eastern engine and power plant market. According to TechSci Research, the Middle Eastern engine and power plant market is estimated to grow to $1.54 billion by 2026 on the back of surging electricity demand in Saudi Arabia and the United Arab Emirates.

By Jung Wook

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