HMM Splashes $2.8B on Containership and VLCC Order in Growth Strategy

South Korea’s largest shipping company, HMM, is pushing forward with its growth strategy, reporting today, October 16, that it has entered into newbuilding contracts valued at approximately $2.8 billion. The company previously announced plans to invest approximately $7.7 billion to expand its eco-friendly shipping as it pursues a strategy to “secure a more flexible and future-ready fleet.”

The current orders are for a total of a dozen 13,000 TEU dual-fuel containerships. Korean media reports that eight of the vessels will be built by HD Hyundai Heavy Industries and four by Hanwha Ocean. All the ships will be dual-fuel LNG. The media report says the vessels are scheduled for delivery in 2027 and 2028.

In September 2024, HMM updated its midterm strategy, saying its goal was to expand containership operations with a capacity of approximately 1.5 million TEU. The company said it would grow to a fleet of approximately 130 vessels. When it first announced the growth strategy, it was targeting surpassing 1 million TEU, and now it stands Alphaliner calculates just below that at 997,170 TEU with a fleet of 93 vessels.

HMM’s strategy also calls for growth in its smaller bulk shipping operations. The company has been buying dry bulk carriers after its efforts to acquire Korea’s SK Shipping failed. It, however, announced a new deal with Brazil’s Vale to transport ore.

Today’s announcement includes an order for two Very Large Crude Carriers (VLCCs). No details were provided on these orders. Online, HMM lists a fleet of 14 VLCCs that it operates, as well as seven product tankers and two LNG carriers.

The expansion also includes four multi-purpose carriers that it will be taking delivery of this year and next as additions to its existing fleet carriers. It is also taking delivery of seven car carriers that will be chartered to Hyundai Glovis for their operations.

The orders announced today continue the investments that began in 2018 with orders for large container ships. Again in 2021 and 2023, the company ordered additional containerships, including its first dual-fuel LNG or methanol vessels.

It is pursuing the growth strategy while the future ownership of HMM remains unclear. Korea’s two large government investment banks attempted to sell the company but could not agree on terms with the selected bidder. Recently, South Korea’s large steel company, Posco, reported it was considering making an offer for HMM as part of a diversification strategy.

The Korea Shipowners’ Association has come out against a takeover by Posco. It announced that it had sent a letter to Posco management urging them to withdraw from considering a bid. The association cited the need for specialized shipping management for HMM. It was noted that Posco attempted to enter shipping with the creation of Keoyang Shipping, only to later sell it to Hanjin Shipping.