Investment plan

HMM unveils $11.3 billion investment plan in its fleet

Invest to survive is the message from HMM CEO Kim Kyung-bae after announcing that South Korea’s flagship carrier will invest more than $11.3 billion over the next five years to expand its fleet and upgrade to environmentally friendly fuels.

By 2026, HMM aims to grow its containership fleet to 1.2 million teu, from the current size of 820,000 teu, and will also expand its dry bulk fleet to 55 vessels, from 29 ships currently.

While container freight rates have been at historically high levels, the dry bulk market has also been healthy, and Kim said there was a need to balance the business development of the two segments.

Mr Kim added that these vessels will be built to run on clean fuels to comply with the International Maritime Organization’s ambition to reduce carbon emissions.

The CEO cited a rapidly changing business environment, placing greater emphasis on environmental sustainability and technological advancements as justifications for the investment.

“The business environment, such as environmental regulations and digital transformation, is changing rapidly, along with uncertainty in the global shipping market,” he said.

“As a global transportation and logistics company, the goal is to continue to survive and grow in the future. If you don’t invest, you can’t survive in the future.

To this end, HMM will form a working group on environmental, social and governance (ESG) management to achieve sustainable growth.

HMM is also upgrading its IT systems that connect artificial intelligence (AI) freight solutions to ground transportation, and recently developed a digital freight booking platform, “Hi Quote”, using its own technology, and plans to create a department dedicated to digital acceleration. .

Mr. Kim added that HMM planned to strengthen its profit base by securing logistics infrastructure such as container terminals and creating additional shipping routes, which had been mentioned as early as 2020.

Asked about speculation that HMM could be sold, a question fueled by increasing purchases of HMM shares by rival SM Line, Mr Kim, who took over as CEO in March, replied: “We don’t have not yet discussed the timing or method of divestment with the major shareholders.

“Regarding the growing dissatisfaction of minority shareholders due to the recent decline in HMM’s share price, the share price is not as good as expected, but I think that is different from the problems commercial.

“If you build a strong and healthy business, the fundamentals will improve and shareholder value will also increase,” he said.