Hyundai Heavy Industries, the world’s largest shipbuilder, announced on Friday that it is establishing a joint venture (JV) with Cummins, a US-based manufacturer of diesel engines, to produce high speed diesel engines for ships and large vehicles.
On September 7, 2012, Hyundai Heavy Industries, Cummins, Daegu Metropolitan City, and Daegu-Gyeongbuk Free Economic Zone (DGFEZ), signed an MOU to construct a high-speed diesel engine manufacturing facility (78,000m²) in the DGFEZ Daegu Technopolis district.
The Joint Venture, with each company holding a 50 percent stake (66 million USD total investment), will have an annual capacity of 50,000 units of industrial high speed diesel engines, while employing more than 500 workers. Construction of the manufacturing facility will begin in the second half of this year with manufacturing slated to begin in 2014.
Hyundai Heavy Industries, which holds a 37 percent market share in the industry, produces large and medium scale engines in Ulsan, South Korea. Cummins Corporation is a global power leader (engines and related technologies) with $18 billion in 2011 revenue.
Daegu Metropolitan City a location well-known for its talented workforce, stable labor management relations, and well-established infrastructure for the automotive industry completed the match.
Daegu Technopolis, the center of Daegu-Gyeongbuk Free Economic Zone, is home of Hyundai IHL (a subsidiary of Hyundai Motor Group), Nakamura Tome (a leading Japanese machine tool manufacturer) as well as 4 National R&D centers.
“With the investment from these two global companies, we expect that it will have positive influence on the local economy by creating quality jobs and enhancing competitiveness of related industries.”, stated Daegu Mayor Beom-Il Kim.
Daegu Gyeongbuk Free Economic Zone Commissioner Byung-Rok Choi added “Today’s investment by Hyundai Heavy Industries and Cummins will elevate the Daegu Gyeongbuk region as a premier location in Korea for automotive manufacturing; and this partnership will open the door for further investment in diesel-engine industry.”
Source: DGFEZ Investment Strategy Team
