HOPE 2021 Let’s run again Korea
A Shipbuilding equipment supplier, ‘S&SYS’ spun off from Samsung in the worst recession.
Under the restructuring, established a company by acquiring stakes with employees.
The main force “Ballast water management system”
Expand overseas customers such as Shell and Mitsubishi
Doubled sales revenue and won a 30 million dollars export award.
Selected as World Class Product of Korea
In 2016, Samsung Heavy Industries(“SHI”) suffered the worst order drought. The amount of the deficit reached 1.2 trillion won in the previous year and a severe manpower restructuring followed. Machinery & Electric System team was not the exception. The conclusion was ‘Spin off’ and ‘Stand alone’.
In September 2017, when there was no end to the shipbuilding recession, S&SYS, a shipbuilding equipment supplier, was born in this gloomy situation. Not many people said they would join the ship that is moving out of Samsung’s strong fence and into the vast ocean. The number of employees in the business division has halved from about 180 to 95. Director Bae Jae-hyuck (current CEO of S&SYS), who was the head of the Machinery & Electric System team at the time, joined forces with the remaining employees to take over the stake in the Machinery & Electric System team. "It was the darkest period of my life," he recalled.
The company, which even a survival was unclear, succeeded in writing surprise ending in its fourth year. Sales revenues more than doubled from 59.9 billion won in 2018 to 130billion won last year. It was selected as the "World Class Product of Korea" by the Ministry of Trade, Industry and Energy and won the "30 million dollars export award" and it has become a strong small company in the domestic shipbuilding industry.
60% → 30% dependence on SHI
On the 31st of last month, when I entered the S&SYS factory in Chilseo-myeon, Haman-gun, Gyeongnam, I noticed a rectangular steel box as tall as an adult. It was the company’ main product, ballast water management system. when a ship loads a cargo, it takes out seawater (ballast water) inside the ship and when unloading a cargo, fills it with seawater to maintain balance. During the Ferry Sewol disaster in 2014, a "lack of ballast water" was blamed for the sinking. This device also plays a role in preventing the destruction and disturbance of the marine ecosystem by removing harmful organisms and pathogens contained in the ship's ballast water.
Even before the spin-off, CEO Bae focused on developing the technology, believing that demand for ballast water management system will increase worldwide. As the International Convention signed in 2017 to protect the marine ecosystem requires the installation of ballast water management systems, S&SYS has set the stage for growth. Last year, half of its sales revenue came from ballast water management system. The industry expects the related market to grow to 40 trillion won within three years.
Its dependence on SHI has been decreasing Its share of total sales decreased from 60% in 2017 to 30%. Instead, it turned to overseas markets. It earns more than half of its sales overseas. In 2019, it supplied ballast water management system to 20 ships of Shell, a global oil major. Its customers include Sumitomo Mitsubishi of Japan and New Yangzi Shipbuilding of China. So far, it has supplied ballast water management systems to more than 750 ships. "We cannot expect growth just by looking at domestic shipbuilders," CEO Bae said. "Technology and global capabilities are the core competitiveness of S&SYS."
Ship Remote Repair in the middle of the sea.
On one side of the factory was a huge line of green steel boxes spanning 20 to 30 meters. It is a ship control system that is being fostered as a new growth engine along with ESS (Energy Storage System). When the switch was raised, a cannon-like sound rang throughout the factory. Kang Sang-yoon, head of the production operation center, said, "It is the sound of the ship's heart working," and explained, "It is a device that monitors and controls various parts of the ship, including the engine, tank, and engine room of the liquefied natural gas (LNG) ship."
S&SYS was also unable to avoid the shock of the new coronavirus infection (COVID-19) last year. Due to the decrease in ship orders, it only filled 70% of last year's target orders. As an alternative, the company is developing Smart RMS (Remote Maintenance System) that remotely controls ships that are operating. It opened RMS Center in July last year and reinforced manpower. Hwang Woi-yeol, Executive director of the Business management & support division, said, "As the need for contactless services grows with COVID-19, demand is expected to increase. We will expand the service as of this year."
S&SYS Chilseo plant next to SHI Chilseo plant will close in January and move to Busan to "Real stand alone." Although S&SYS left Samsung's arms, its DNA remains in many parts of the company. S&SYS is applying a thorough performance-oriented maintenance system and also operating "Concentration day" that has continued since when it was Machinery & Electric System team on the SHI. Executives and employees gather to discuss the situation and select the person in charge to lead the new business. CEO Bae said, "As an Employees owned company, it is the power of the company that everyone sweats with a sense of ownership."