HD Hyundai Marine Solution signs record $60 million maintenance deal

The aftermarket subsidiary of HD Hyundai signed a $60 million contract to provide equipment and service for 38 vessels belonging to an undisclosed European company.

HD Hyundai Marine Solution CEO Lee Ki-dong speaks at the press conference held in HD Hyundai's global research and development center in Seongnam, Gyeonggi, on April 2. [HD HYUNDAI MARINE SOLUTION]

HD Hyundai Marine Solution, the aftermarket subsidiary of HD Hyundai, signed a $60 million deal for vessel maintenance with a European shipping company.

The contract is the largest single transaction in the company’s history, the ship service provider said on Monday.

The content of the long-term service agreement signed between the parties entails the supply of equipment, materials and services by HD Hyundai Marine Solution to maintain 38 vessels of the undisclosed European firm until 2029.

Global shipping companies sign long-term service agreements to minimize the time spent on repair and maintenance, allowing them to maximize the period of vessel operations. In line with demand, the Korean ship service provider is attempting to strengthen business ties with its clients utilizing a division specific to long-term service agreements and network through its foreign subsidiaries.

The company has been pushing to expand its cash cow business in the aftermarket sector. HD Hyundai Marine Solution CEO Lee Ki-dong said at a press conference held in April — prior to the company’s listing — that 40 percent of the funds allocated through the initial public offering will be spent on building logistics infrastructure and acquiring port warehouses domestically and globally.

“Increased shipping volume will contribute to stable growth in the aftermarket sector, and we will maintain our status as a leading global company by providing optimal service and quality,” an HD Hyundai Marine Solution spokesperson said in a statement.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]