Daewoo Shipbuilding & Marine Engineering (DSME) has won the right to manage Iran's state-run shipbuilder, paving its way into the Middle Eastern nation with huge growth potential.
DSME said Monday that it recently signed a memorandum of understanding (MOU) with the Iranian government to run Iran Shipbuilding & Offshore Industries Complex. Under the agreement, DSME will also transfer manufacturing technology to the Iranian shipbuilder.
The deal is widely expected to help DSME and other domestic shipbuilders win orders from refiners and other companies in Iran.
Iran has been seeking to cooperate with Korean shipbuilders to modernize its aging dockyards. It has been an important task for the country, which holds the world's fourth-largest crude oil reserves and the second-largest natural gas reserves, to foster its shipbuilding industry to build oil tankers and offshore plants.
According to DSME officials, the Industrial Development and Renovation Organization of Iran (IDRO), the state-run organization in charge of the nation's strategic industries such as automobiles and shipbuilding, is seeking to form a partnership with the Korean shipbuilder.
Among others, IDRO wants to acquire advanced technology and dockyard management knowhow from DSME in order to transform Iran into a shipbuilding industry hub in the Middle East. The organization also requested DSME to invest in Iran to manufacture equipment and intermediary materials.
Hyundai Heavy Industries, Samsung Heavy Industries, and other local firms are also expected to make inroads into the Middle Eastern nation, which has quickly emerged as a promising market for struggling shipbuilders in South Korea.