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HMM strategy involves diversifying its business portfolio and leapfrog to become a global top-rated shipping and logistics company
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The plan includes expanding its containership capacity to 1.2 million TEUs by 2026
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HMM will invest over US$11 billion to secure core assets such as ships, terminals, and logistics facilities through to 2026
South Korean container shipping giant HMM will invest more than KRW15 trillion (US$11.41 billion) on a range of initiatives under a mid- to long-term strategy to diversify its business portfolio.
The initiatives include securing core assets such as ships, terminals, and logistics facilities through the next five years from 2022 to 2026. Part of it is expanding the fleet capacity of containerships to 1.2 million twenty-foot equivalent units (TEUs) by 2026 from the current 820,000 TEUs, HMM, formerly called Hyundai Merchant Marine, said in a statement.
The company said that it is expanding its bulk business by nearly doubling its fleet to 55 ships from the current 29 ships also by 2026.
HMM said its future strategy has been established to respond to growing uncertainty arising from ever-changing business circumstances and lay a solid foundation for sustainable growth.
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More specifically, HMM’s strategy covers five categories:
- Container and bulk business strategy
HMM will expand its service network with an eco-friendly container fleet of 1.2 million TEU by 2026. It also plans to secure logistics infrastructure such as terminals in key locations to reinforce its profit structure. Moreover, the bulk fleet will be cemented with a fleet of 55 ships, substantially increased by 90% from the current 29 ships.
- Environmental strategy
The company will continue to enhance environmentally friendly services for carbon neutrality by 2050 and explore the likelihood of ordering ships using alternative fuels in the future. HMM will also make enterprise-wide R&D efforts into the use of carbon-neutral fuels in cooperation with industrial players.
- Digital Strategy
HMM launched “Hi Quote,” an online sales platform based on its own technological capabilities.
It plans to integrate its inland logistics network into Hi Quote and apply freight rate solutions powered by artificial intelligence at a later date. Digitalization is expected to be promoted by improving online-based e-platform and accelerating ERP upgrades.
- Organization effectiveness strategy
The liner company aims to strengthen its business areas by developing a customer portfolio, enhancing sales power and expertise, and training employees. Especially, it will organize dedicated teams to accomplish strategic projects and explore new business opportunities.
- Investment and financial strategy
HMM plans to invest more than KRW15 trillion over the next five years, from 2022 to 2026, in preparation for future competitiveness. Of this amount, KRW10 trillion will be allocated to secure core assets such as ships, terminals, and logistics facilities. KRW 5 trillion is scheduled to be assigned in future strategic projects to diversify HMM’s business.
HMM will also invest KRW150 billion in digitalization by improving online-based ‘e-platform’ and accelerating ERP upgrades.
“Our strategy is to ensure perpetual growth of HMM under the new vision – a global leading company generating sustainable value for the world,” HMM president and chief executive Kim Kyung Bae said.
“We will continue to drive efforts for contribution to the global community.”
