Following published reports of a spinoff of Hyundai Heavy Industries' (HHI) construction group, which includes Hyundai Construction Equipment Americas (HCEA), M.S. Kang, HCEA president, clarified plans in a letter to dealers:
"HHI plans to establish a separate, wholly-owned subsidiary company for our ongoing construction equipment and fork lifts businesses. This restructuring process provides several benefits to our new CE businesses and the Hyundai brand:
- The ability to generate higher levels of operating and administrative efficiencies
- An organization focused on delivering improved products, services and processes
- Processes that support better communication and timely decision-making
- Resources concentrated on building world-class forklifts, wheel loaders, and excavators."
Kang told dealers that the restructuring would be completed in the first half of 2017 "without any interruption of our daily businesses."
According to a report last week on Pulse.com, HHI plans include its remaining nonshipbuilding businesses, including electric-electronic systems and construction equipment, in addition to earlier divestiture targets of robotic, green energy and facility support operations.
The Pulse report says the two operations took about 18 percent of the total sales of the shipbuilder with sales from electric-electronic systems and construction equipment businesses totaling 2.51 trillion won ($2.20 billion) and 2.23 trillion won, respectively, last year.
According to Pulse.com, The restructure would make the shipbuilder slimmer to fully concentrate on its core function as a shipyard. The additional liquidity from the sale would better equip the company against prolonged market slump.
This story has been updated.