One of the most spectacular boom-and-bust figures from shipping's last great shipbuilding cycle is making a return.

Kang Duk-soo, the architect of South Korea's former STX empire, is re-entering the industry through D-Ocean Asset Management, the consortium that is acquiring control of SK Oceanplant for around KRW410bn ($298m).

SK Oceanplant is the former Samkang M&T, a Goseong-based specialist in offshore wind and, more recently, shipbuilding. The company was acquired by SK Ecoplant in 2022 and renamed the following year. Its roots lie in heavy steel fabrication, ship blocks and offshore structures, and it also builds special-purpose vessels while undertaking repair and conversion work. The acquisition comes as Korean mid-tier yards, long overshadowed by the Big Three — HD Hyundai Heavy Industries, Samsung Heavy Industries and Hanwha Ocean — seek new roles in a market where the top builders' orderbooks are filled years ahead.

In a recent release, the company said it has signed contracts for six 115,000 dwt aframax crude tankers, with two additional options. The firm portion of the deal is worth about KRW600bn, rising to around KRW800bn ($580m) if the options are exercised. The aframax orders reflect sustained tanker contracting activity in the current cycle, one of the segments that has driven the broader pickup in global shipbuilding demand.

A supercycle figure

Kang was one of the most high-profile names during shipping's previous supercycle in the first decade of the 21st century.

He began his career as an employee at Ssangyong Cement in 1973, eventually becoming chief financial officer of Ssangyong Heavy Industries before using his own money to acquire the business in 2001 and renaming it STX.

A series of audacious acquisitions followed. Pan Ocean, one of South Korea's largest shipowners, joined the group, and in 2007 Kang acquired Norway's Aker Yards, creating STX Europe. In China, he developed STX Dalian, one of the most ambitious greenfield shipbuilding complexes of the era. Within a decade, STX had grown into one of South Korea's largest conglomerates.

Then came the crash. The 2008 financial crisis destroyed newbuilding demand, while STX's highly leveraged expansion left the sprawling group exposed to a severe liquidity squeeze. Restructuring began in 2013, and the empire was rapidly dismantled. The STX collapse became a defining cautionary tale of Korea's last shipbuilding downturn, an era that also forced state-led restructurings across the country's major yards and left a lasting policy imprint on how Seoul manages excess capacity in the sector.

Kang's personal fall was equally dramatic. He was arrested and detained in April 2014 and later sentenced to six years in prison over corporate offences including embezzlement, breach of trust and accounting fraud. On appeal in October 2015, the accounting-fraud conviction was overturned and his sentence was reduced to three years, suspended for four years, resulting in his release.

A postscript and wider revival

There is a remarkable postscript to the STX story. STX Dalian, mothballed for close to a decade, was acquired by Hengli Group in 2022. Reborn as Hengli Heavy Industries, the giant complex is now one of the fastest-growing shipbuilders in the world, with an enormous orderbook spanning tankers, bulkers, containerships and gas carriers.

Other ghosts from the last boom are stirring as well. Rongsheng Heavy Industries, once China's largest private shipbuilder before collapsing during the previous downturn, is being revived as Wuhu Shipyard brings two of its giant Nantong drydocks back into service for newcastlemaxes and VLCCs.

Global ship contracting has accelerated sharply, and dormant Asian capacity is returning as established yards stretch delivery slots towards the 2030s. How quickly returning capacity such as SK Oceanplant's newly contracted tanker slots can be delivered, and whether history's leverage lessons are heeded this time, will shape the next phase of the cycle.

Source: Splash247