"S&SYS", a shipbuilding equipment supplier, its ‘stand-alone’ is cruising thanks to marine environmental regulation. As orders for Ballast Water Management System increase, S&SYS order backlog is being piled up. Industries are also increasingly interested in S&SYS, which was spun off from Samsung Heavy Industries.
S&SYS is a start-up company that marks its fourth anniversary this year. The Korean domestic shipbuilding industry is led by the “Big 3” shipyards, so the market awareness of shipbuilding equipment supplier is not high. The industry explains that S&SYS has a short history and is small in size, but there are many reasons to pay attention.
S&SYS was spun off from Samsung Heavy Industries in September 2017, when the shipbuilding industry was in the economic depression. It is running their business through the Employee Stock Ownership Plan(“ESOP”), which is employees directly or indirectly participate in management by owning stocks of the company.
The reason why S&SYS introduced the ESOP is highly related to its purpose of the establishment. The predecessor of S&SYS is Samsung Heavy Industries’ Mechanical and electric system team. Mechanical and Electric system team provided solutions related to ships to domestic and foreign shipbuilders and shipping companies including Samsung Heavy Industries. it has handled hardware and software system in three areas; Automation system, Environment and Power Distribution. It has more than 1,250 international certificates and has remarkable ‘track records’ such as installing automation systems around on 2,000 ships. It is said that the technology and competitiveness of related fields are excellent.
S&SYS left its 'Strong fence' which is Samsung Heavy Industries in 2017. At that time, Samsung Heavy Industries was enduring a "drought" as its order backlog was sharply reduced. New orders from the shipbuilding and marine sectors, which exceeded 23 trillion won at the end of 2015, plunged to 11 trillion won in the third quarter of 2017. Sales revenue also plummeted.
In the case of the shipbuilding industry, which is an order based industry, the decline in orders means that sales revenue will drop sharply after a year or two. As part of its self-rescue measures, Samsung Heavy Industries is pushing to reduce fixed costs and reorganize its workforce based on its core capabilities. In doing so, it pushed for the spin-off Machinery & Electric System team.