H Y U N D A I H E AV Y I N D U S T R I E S C O . , LT D .
E N G I N E & M A C H I N E R Y D I V I S I O N
VOL.18 April 2008
2007
OVERVIEW
trong economic growth in China,
S India, and other Asian markets
continued to drive growth in global ocean
shipping, pushing demand for
containerships and bulk carriers - and the
huge marine engines that power them - to
record highs. Demand for side thrusters
kept pace with growth in the containership
industry.
Robust growth in the Middle East, Latin
America, and Africa continued to drive
demand for heavy fuel oil power plants and
small- and medium-size diesel power
generators.
The machinery sector also continued to
prosper as major automakers added new
production plants and production lines in
Europe and India.
In 2007, HHI became the world’s first 2-
www.hhi.co.kr www.hyundai-engine.com
stroke engine maker to pass the 70 million power plants - from Cuba since 2005.
bhp production milestone, and shattered In 2007 we added a solid US $293 million
its previous order record, set in 2006, by in PPS orders from Brazil, the Dominican
booking US $3.25 billion in new contracts. Republic, and Nicaragua to our order book.
In the marine engine business, we We also delivered over 1,500 industrial
maintained our industry-leading 35% robots, including 600 for Hyundai Motors
market share as we received orders for 540
2-stroke and 1,420 4-stroke diesel engines
auto plants in the Czech Republic and
China.
worth US $2.71 billion. A significant portion
of these orders - many of which were for
complete ship propulsion systems - came
from new shipbuilders in Korea, China, and
Turkey. Our marine machinery business
also made significant gains, winning orders
for marine pumps and side thrusters from
rival shipbuilders, including Samsung
Heavy Industries and STX Shipbuilding.
Our diesel power generator business
continued to make inroads in Latin America
in 2007, helping clients increase their
power capacity rapidly and cost-effectively.
Our experience and market has helped us
win US $800 million in orders for packaged
power stations (PPS) - containerized diesel

2008
OUTLOOK
hile a tightening international
W credit market is expected to
impact the global shipbuilding industry,
Asia’s economies are forecast to deliver
solid growth. Competition will intensify in
the marine engine business as makers
Message from the COO
Valued customers and business partners,
We at HHI-EMD enjoy the position of
world’s top engine builder thanks to your
interest and support, and thanks to our
staff members who have worked hard to
help the Division become a leader in its
field.
I would like to take this opportunity to
thank you for your support and your
patronage.
As you are well aware, domestic and
foreign business circumstances change so
2 I HHI-EMD NEWS
continue to ramp-up capacity, while
demand for marine hydraulic pumps and
side thrusters will continue to grow in step
with the overall shipbuilding industry.
Demand for short-lead-time energy
solutions across Latin America, India,
and Africa will keep PPS orders growing
briskly. We also see growing demand for
robots in LCD manufacturing as the
industry continues to add capacity and
changes to larger glass substrates.
rapidly that we cannot foresee even
the very near future.
Worldwide money market
insecurity due to the American
sub-prime mortgage crisis, a
continued rise in oil and raw
material prices, and other factors
all have a great influence on our
business.
In the midst of these challenges we
continue to move forward;
building new factories, remodeling
existing factories, and installing
new equipment, with the goal of
establishing a production system
by 2009 with an annual capacity of
700 2-stroke engines, 2,500 4-
stroke engines, and 400 large
propellers.
This increase in production will help us
meet rapidly increasing engine demand.
However, we can also expect a time when
demand for engines will decrease,
although we do not know when that time
will come.
Therefore we have to prepare for the
possibility of bad times to come.
For HHI-EMD, 2008 and 2009 will be
critical.
We have to begin increasing our sales
from our current level of US $3.7 billion to
In 2008, our order target will hold steady
at approximately US $3.7 billion as we
continue to leverage our recent
successes to increase our international
competitiveness. We’re currently in the
middle of a capacity expansion plan that
will boost our annual 2-stroke marine
engine production from 8 to 19 million
bhp, and our 4-stroke marine engine
production capacity from 3 to 5 million
bhp, by 2010.
meet our 2010 target of US $5.6 billion.
Beginning this year, in order to meet this
target, we will enhance our production
capacity and establish a mass production
system. This will allow us to work at full
capacity, increasing our ability to fill
engine orders.
We will also increase our investments in
products other than engines, including
pumps, presses, robots, and thrusters, and
expand our market share in these products.
We have an experienced Staff, an
established business system, skilled
production workers, and state-of-the-art
facilities.
With all of these parts working together,
I firmly believe that we can overcome any
potential difficulties and continue to
prosper in the future.
HHI-EMD will continue to emphasize
customer service and maintain its
emphasis on product quality.
Once again, I would like to thank you for
your continued support.
Yoo Seung-nam
Executive Vice President & COO
Engine & Machinery Division
2-STROKE DIESEL ENGINES
HHI-EMD’s World Class Products
2-Stroke Diesel Engine 2-Stroke Diesel Engine 4-Stroke Diesel Engine
Crankshaft
Cylinder Liner Propeller Packaged Power Station Cargo Oil Pump
Marine Propulsion Engine and Marine GenSet (HiMSEN)
orders from India
HI-EMD has recently signed a
H marine engine supply contract
with an Indian shipyard and will supply
four sets of 6S60MC-C and one set of
5S42MC propulsion engine, and 15
sets of 5H21/32 GenSet engines for
120K & 20K bulk carriers.
A previous contract, signed in January
of this year, will supply 24 sets of
GenSet engines (HiMSEN 5H17/28) to
the Indian shipyard. In this most recent
contract, HHI-EMD succeeded in
receiving orders for both propulsion
engines and GenSet engines.
With this contract, HHI-EMD has
improved its foothold in the Indian
4-Stroke Diesel Engine
Crankshaft
Industrial Robot
market.
The contract will also be helpful in
securing a more stable level of
production in the future by enlarging
the export market base.
India already has many small- and
medium-sized shipyards and is
building or planning to build large-
sized dry docks. The country is a very
promising market for main propulsion
engines and HiMSEN engines.
The small- and medium-sized Indian
shipyards are expanding their facilities
into large- sized shipyards, and
shipyards that have built naval vessels
are undergoing renovations to build
commercial vessels.
These changes in Indian shipbuilding
market indicate that the market for 2-
stroke marine propulsion engines and
HiMSEN engines for marine GenSet is
expected to grow substantially in the
future.
VOL.18 April 2008 I 3
4-STROKE DIESEL ENGINES

HiMSEN H32/40 Engine

ast year, HHI-EMD began sales of the HiMSEN H32/40
L engine.
It is the most economical and environmentally friendly engine
among those with a capacity between 3,000kW-4,500kW.
The H32/40 engine has a hi-pulse exhaust gas system, which
improves acceleration and part-load performance. It also has a
single camshaft, which creates a larger air chamber compared
to dual camshaft models. This means that one is fuel cam with
starting cam, the other is intake/exhaust valve cam.
Development of The engine also has a modularized front-end block. Most of
the auxiliary equipment, including pumps, filters, coolers, and
HiMSEN Gas Engine valves, have been concentrated on front-end block, making
them directly accessible from the outside, allowing easier
HI-EMD has recently
H developed its own HiMSEN
gas engine model and has
maintenance.
The fuel injection systems in most similar engines are
very complicated with many parts. The H32/40 engine,
successfully completed its final however, has a simple, dependable fuel injection system.
performance test. HHI-EMD has already received H32/40 engine orders for
The H17/24G, which is an H17/24 336 GenSets for 8,600-14,000TEU container vessels from
Main Engine Data diesel engine converted to gas shipowners that include Seaspan, Rickmers, C.P. Offen, and
Engine Type H17/24G(GV) operation, was developed in order to Danaos.
Bore mm 170 meet the need for co-generation and The first GenSet for a 12,600TEU container vessel, owned by
Stroke mm 240 land-generation. CMA-CGM, will be delivered at the end of January, 2009, with
Engine speed rpm 1,200
Output/cyl. kW 110
The engine is highly efficient and the vessels being constructed at Daewoo Shipbuilding &
Piston speed m/s 9.6 has low emission levels. Marine Engineering Co., Ltd. in Korea.
BMEP bar 20.2
Combustion
It is expected to be in demand in For marine propulsion usage, HHI-EMD has won H32/40
OCSI
Efficiency % 42 both domestic and overseas engine orders totaling 58 sets for small-sized tankers and
NOx(@13%O2) ppm 50 markets. bulk carriers from shipowners that include Titan Ocean,
5 550
6 660 The high level of efficiency makes Novoship, Chinta Asia, and Fongyuen.
7 770 the engine more practical due to the
8 880 In the past year, HHI-EMD has achieved remarkable sales
Output
[kW] 12 1,320 world’s increasing oil prices, and the success with H32/40 engines thanks to the support of
14 1,540 lower emission levels will help it to domestic and overseas customers.
16 1,760
18 1,980
meet ever-stricter international
20 2,200 environmental regulations. Further
research is being performed on the
V-format engine to make still further
improvements in these areas.
The gas engine will be available
commercially in 2009 with an
output of 1,320-2,200kW.

4 I HHI-EMD NEWS
Completion of HiMSEN Engine Assembly and Test Shop
HHI-EMD recently held a
H ceremony celebrating the
completion of a HiMSEN engine assembly
and test shop.
The HiMSEN engine factory has been
constructed to increase production volume
in order to meet demand for the engines,
which continues to increase very sharply.
The factory will produce HiMSEN engines
with outputs ranging from 1,800kW to
6,000kW.
4 sets of HiMSEN engines, which were Quality, reliability and customer service for
originally developed in August of 2000,
were produced and delivered in 2001, 422
HiMSEN engines are highly appreciated by
our customers.
sets in 2006, and 832 sets last year.
1500 sets of HiMSEN engines will be
produced this year.
The production of HiMSEN engines has
doubled every year without sacrificing the
quality, reliability, and customer service that
has made the HiMSEN engine an industry
leader.

Entering HiMSEN School

From Chile and Brazil for
HiMSEN Engine Training

ngineers from Chile and Brazil
E are taking a training course at
the HiMSEN School that began March
31, 2008.
The operating engineers for the BIOBIO
PPS Project (Chile) and the Alcoa PPS &
Camacari DPP Projects (Brazil) entered
the HiMSEN engine training course run
by the Engine Development & Test
Department of HHI-EMD. The course
provides the technical education needed
to operate, repair, and provide
maintenance to PPS (Packaged Power
Stations: Movable Electric Generators)
and DPP (Diesel Power Plants), which
will be installed in Chile and Brazil.
Following previous orders from Cuba
and El Salvador, Chile and Brazil placed
orders for HiMSEN-engine Power Plants.
The global demand for HiMSEN engine
power equipment is rapidly increasing,
and orders for HiMSEN engines are
expected to increase as a result.

VOL.18 April 2008 I 5

 4-STROKE DIESEL ENGINES
Successful sea trial for an
800-ton marine research vessel with a
HiMSEN-Engine
Propulsion System
n April 5, 2008, HHI-EMD successfully
O carried out a sea trial for an 800-ton marine
research vessel (shipowner: National Fisheries
Research and Development Institute) equipped with a
HiMSEN-engine (6H21/32P) propulsion system.
HHI-EMD provided technical support to the
shipyard from the initial ship design stage and
received an order for the propulsion system.
The system includes a HiMSEN propulsion engine,
reduction gear, generator, shaft, CPP, and controller.
This is the first HHI-EMD project that involves
2 propulsion engines and 1 CPP system.
This has proven to provide excellent combustion
performance when the engine is operated at low-
loads and reduces both vibration and noise.
6 I HHI-EMD NEWS
Order for Six Additional
1.7MW Packaged Power Stations for Africa
HI-EMD won an order for six additional Packaged Power Stations
H (PPS), which will supply electric power to a mining site in Namibia. The
6 PPS are in addition to last year’s contract to supply six 1.7MW Packaged Power
Stations to be installed in Malawi.
HHI-EMD recently signed a contract with Paladin of Australia, a developer of
uranium mines, to supply and install six 1.7MW Packaged Power Stations that
will use 6 sets of Hyundai HiMSEN 9H21/32 diesel engines.
The PPS will be delivered in September of 2008 and installed by the end of the
year at a uranium site in Namibia.
This contract is the second order from Paladin for an area in Africa. HHI-EMD
expects increased demand for the PPS in the area.
Technological Development leads to
Reduced Exhaust Gas Noise
he Maritime Research Institute and Diesel Power Plant
T Engineering Department have recently developed a diesel
generator exhaust gas silencer.
The exhaust gas silencer uses the first resonator arrangement it’s a
virtual partition in Korea. It lowers exhaust gas noise at low
frequencies (5-10 dB) better than existing silencers. This new
development is expected to lead to the prevention of outdoor
noise problems caused by diesel generator exhaust gas. It
will also play a big role in decreasing stationary
diesel generator exhaust gas.
 Haiti President’s
visit to PPS site
he President of the Republic of Haiti recently
T visited a PPS site in Haiti where HHI-EMD
engineers have started PPS operations.
The President encouraged the engineers, who are
working hard to establish and test PPS. He said that
the construction will be a great help in supplying
stable power to Haiti, which has been suffering from
a lack of power supply facilities.
HHI-EMD is constructing 61.2MW-class PPS
equipped with HiMSEN engines in the Central
American nation of Haiti.
WHEC first Wärtsilä 50DF engine
will be delivered on November this year
he factory construction is proceeded with the program as planned.
T Now cumulative progress is above 50% and the shop will be
completed end of April,2008.
And all equipments for shop test and other facilities will be finished end of
June,2008. The production will start from 15 June,2008.
The first engine will be delivered early of November 2008. WHEC already
secured more than 50 engines and it is anticipated a lot of order from this
year. Because nowdays the price of crude oil has been increased rapidly and
the demand of clean energy is soaring.
Almost all ship owners want to install Wärtsilä 50DF engine for their LNG
carriers because it has many advantages comparing with traditional steam
turbine.
Last year new LNG market was depressed but from this year a prosperous
condition is expected. WHEC will exert its best efforts to meet the demand of
customers.
Main benefits
1. Highly efficient: 43% compared to 29% efficiency of today’s steam turbines.
2. Less power required: Uses the same power for propulsion and cargo handling.
3. Reduced emissions: NOx reduced by 80%, CO 2 reduced by 20%, and SOx
emissions eliminated.
4. Reduced size: Allows greater installation options and optimization of ship design.
5. Variable-speed drive: Ensures that full torque is available throughout the entire
speed range and full power for negative RPM improving maneuverability and crash
stop situations.
6. Redundancy in electrical equipment: Maintain approxmately 70-90% of full speed
with single failure.
Maintenance can be performed during normal operations.
VOL.18 April 2008 I 7
PUMPS

Increased orders for Hyundai Hydraulically Driven

Side Thrusters Submerged Cargo Pump

n 2005, HHI-EMD successfully developed a hydraulically driven

I submerged cargo pump used for chemical and product carriers, crude
oil carriers, and FPSO units.
Since that time, the following orders have been received from domestic &
foreign customers.
n 2006, HHI-EMD received orders for 12 Side
I Thrusters, a product developed within the
Division in 2005.
ShipOwner Shipyard No. of Ship Ship Type
By 2008 the number of orders have increased steeply
and HHI-EMD has captured a large section of the Selay Denizcilik (Turkey) Selay Denizcilik 1 PC Tanker
market.
IMT (Korea) Kwang Sung 2 PC Tanker
Including Thruster for LNG vessel with 2,000kW
manufactured and supplied to DSME Co., Ltd. in
Seawing (Hong Kong) 21C 1 PC Tanker
2007, the main companies of ship owners are Korea
Line Corp. in Korea and Irisl, C.P. Offen, Schulte, Sekwang Shipping Co., Ltd. Sekwang
2+2 PC Tanker
(Korea) Heavy Industries
MSC, SCI, Seaspan, Neptune, North Capital, Ray,
Hartmann from foreign countries, and HHI has
received various Thrusters for 106 vessels and these With these orders, HHI-EMD has expanded its domestic & overseas
are under construction in 2008. marketing for the pump.
And, besides HHI received L/I (Letter of Intent) for 40
vessels. As you seen above, preferences for Hyundai The Hyundai Submerged Cargo Pump meets all international rules and
Thruster by domestic and overseas ship building regulations. The HHI-EMD Quality System has been independently
companies and ship owners companies have been evaluated and is registered in accordance with ISO Standards, and is ISO
increasing day by day. 9001 certified.

HHI-EMD exhibited the Hyundai Submerged Cargo Pump at KorMarine

2007, held in Busan, Korea, and received a good reaction from many
visitors, including representatives from shipyards, shipowners, and
Classification Societies.

8 I HHI-EMD NEWS
ROBOT SYSTEMS

8G LCD Robot Developed by HHI-EMD in

Cooperation with the LG Display Company
HI-EMD started development on an 8th
H Generation LCD Transfer Robot (8G LCD
Robot) under a cooperative development agreement
with the LG Display Company in January of 2007.
The 8G LCD Robot development was successfully
completed in November of 2007.

The LG Display Company hosted a Quality

Evaluation Event for the prototypes in December of
last year.

During the event, LG Display’s Evaluation

Audit considered Hyundai’s new 8G LCD
Robot to be of higher quality and to
perform better than comparable Japanese
robots.
As a result of the 8G LCD Robot’s successful
development, HHI was awarded a 100-Unit LCD-
Robot Contract from the LG Display Company and
expect to receive orders from companies looking for
import substitutions and export expansion.
HHI-EMD has delivered more than 15,000 units of
6-axis Articulated Robots, mainly to the automotive
industry.

The newly developed robot will create a solid

foundation from which HHI expects to become a
leading global supplier of robots.

8G
LCD
VOL.18 April 2008 I 9
ROBOT SYSTEMS

Completion of test driving for

Welding facility for Passenger Train Station in Changchun, China
HI-EMD has recently completed domestic
H test driving and inspection with presence of
client for the order of welding facilities of gantry
received from passenger train station in Changchun,
China.
This system is spot welding facilities for assembling
passenger train. HHI received an whole order of gantry
and peripheral facilities in last year, and HHI completed
domestic performance test driving with success.

HHI has supplied 8 consecutive similar facilities since

HHI received the first order from the client. HHI received
this order additionally by achieving excellent reputation
of HHI’s technology from the clients, and it would help
to expand the further sales to overseas companies with
same kinds.

the whole order of installation work for

Completion of loading Robotic System of 282 robots and peripheral facilities in
the Czech plant.
HMC in the Czech Republic
Shortening of installation period in
Czech and earlier accomplishment of
production are expected since HHI
applied the latest technology and
manufactured test automobile and
obtained the quality requested by client.
Its installation in the Czech Republic
will be starting in January 2009.

Through the completion of the

HI-EMD has successfully
H completed the loading of
robotic machinery for Czech plant of
Hyundai Motors Corp. after the
processes of temporary installation in
construction of Kia Motors Corp. in
Slovakia and successful performance of
plant in the Czech Republic, HHI has
obtained a reputation for excellent
technology of robot system and
Korea and test driving, and inspection
with presence of the client.
This robot system is the facility for
besides, it would help to enlarge the
sales of robot system to European
automobile manufacturers.
assembling the body of automobile and
in the beginning of 2008, HHI received

10 I HHI-EMD NEWS
AFTER SERVICE
Strategy meeting for Spare Part Sales Agencies
n April 11th, 2008, HHI-
O EMD held its first-quarter
strategy meeting for spare parts sales
agencies.
Mr. Yoo Seung-nam, Chief Operations
Officer of HHI-EMD, took part in the
meeting, as did 8 representatives of
diesel engine spare parts sales
agencies, including HEESC in
Rotterdam, to discuss recent
results.
Based on those recent results,
promotional and support strategies
were reviewed for spare parts sales
Agencies. The goal was to improve
sales in order to meet future sales
targets.
Mr. Yoo Seung Nam emphasized that
mutual cooperation is needed between
HHI-EMD and spare parts sales
Publication of collected
Service Letters
agencies, and that the agencies have to
prepare for risks and obstacles when
developing clients.
HHI-EMD does everything it can to
help sell its parts, providing technical
n February of 2008, HHI-EMD
I published a collection of service
letters.
HHI-EMD has collected and published
service letters since 2002.
The letters, sent to clients, involve
product improvements, general
maintenance, safer driving methods for
2- and 4-stroke engines including
HiMSEN engines.
As a part of its active customer service,
the division has sent the contents and
a promotional plan involving pre-sales
service to clients.
The process has received very positive
client evaluations so far.
Service letters published in the latest
collection contain information
support including the retrofitting of
alpha cylinder lubricators and the
exchange of older engines into new
HiMSEN diesel engines to maximize
services.
regarding marine engines and
HiMSEN engines.
In addition to providing information to
customers, the collected letters are
also used for sales data. The
information is used in short
presentations when clients or related
companies ask about
engine quality or technical services
provided by HHI-EMD.
Previously published service letters
were provided to licensed companies.
This has changed as the service letters
are now being used to promote the
company.
VOL.18 April 2008 I 11
 www.hyundai-engine.com

HiMSEN

Marine Pumps

Submerged Cargo Pumping Systems Cargo Oil Pumps Steam Turbines Thrusters

Optimal marine diesel engines and cargo oil pumping system

solutions to cope with market changes and customer needs
HiMSEN, the Hyundai-developed marine diesel engine, is designed to be highly practical
and environmentally friendly. To date, over 4,560 sets of HiMSEN engines
have been ordered from shipowners and power plant owners throughout the world, with each sale
further bolstering the HiMSEN’s global reputation.

Hyundai provides its customers with high-tech marine cargo oil pumping systems,
including cargo oil pumps, hydraulically driven submerged cargo & ballast pumps,
and thrusters, all of which have been developed by Hyundai. HHI continues to use its decade-plus
of experience and its renowned R&D department to create a better future for the marine pump
industry.

Hyundai Heavy Industries Co., Ltd.

Engine & Machinery Division
Engine Sales Dept.
1, Jeonha-dong, Dong-gu, Ulsan, Korea
Tel: +82 52 202 7281
Fax: +82 52 202 7427
Email: k150@hhi.co.kr
Pump Sales Dept.
1, Jeonha-dong, Dong-gu, Ulsan, Korea
Tel: +82 52 202 6191
Fax: +82 52 202 6190
Email: pump@hhi.co.kr