The South Korean shipbuilder signed a deal with Iran’s Industrial Development and Renovation Organization (IDRO) to help spur Iran's shipbuilding industry.

Daewoo Shipbuilding and Marine Engineering Co., Ltd. (DSME) said it has signed an agreement to help develop Iran's shipbuilding industry.

The South Korean shipbuilder signed the deal with IDRO to establish a joint venture company that will develop an Iranian shipyard in cooperation with DSME’s Okpo shipyard. The joint venture company will engineer and build the types of ships needed by Iran, DPME said.

Since 1983, DSME has delivered 38 ships valued at $1.65 billion to Iranian companies, including the Islamic Republic of Iran Shipping Line (IRISL) and the National Iranian Tanker Company (NITC).

Shipyards globally, but especially those in South Korea, have been hard hit by the slowdown in the world economy and excess capacity in many segments of the shipping industry.

“The dearth of new ordering has hit especially hard in South Korea,” Danmarks Skibskredit (Danish Ship Finance) said earlier this month in a review of the industry. South Korea “has for a long time been a preferred partner for many shipowners, especially for container, gas and tanker orders.”

During the first ten months of 2016, new ship orders were 70 percent lower than in the same period the prior year, and South Korea only attracted 16 percent of those orders.

It was big news earlier this month when IRISL ordered 10 ships - four 14,400-TEU containerships and six 50,000 DWT product/chemical tankers - not from DSME, but from rival South Korean shipbuilder Hyundai Heavy Industries.

Korea’s Yonhap News Agency said in a report this week that 300 office workers at DSME will go on a month-long unpaid leave as part of a cost-cutting plan.

“They will be the first batch of DSME's 4,700 desk-job employees who will take turns on unpaid leave from January in line with the company's self-help measures aimed at helping the ailing shipyard stay afloat,” Yonhap reported, noting how the company has about 11,200 employees, with 42 working in offices and the remainder doing production work.

(Source: American Shipper)