CO., LTD. ENGINE & MACHINERY DIVISION VOL.21 April 2009 www.hhi.co.kr www.hyundai-engine.com

I think that this performance is our pride and The power to plow through the result of endurance.

This year we set our goal to receive orders tough Challenges amounting to US$ 3.8 billion and to achieve sales of 5 trillion Won. We will promote the aggressive production goal including 2- his year, we are having a hard time Last year, HHI-Engine & Machinery stroke engines, 4-stroke engines, large T because of the recession caused by Division(EMD) achieved the annual 10 propellers, industrial pumps, marine pumps, the global financial crisis began from the million production in 2-stroke engine - first and industrial robots. final quater of 2008. We cope with this in the world. We were once again the world’s We are facing difficulties due to the financial situation it will be an opportunity for us to largest maker of diesel engines [7K80ME-C9 crisis including the cancellation of orders overcome a critical moment and strengthen pictured] in terms of total horsepower, and payments but we can achieve our our position in the market. producing a combined total of 14.6 mil bhp. business goal as follow. 2-STROKE DIESEL ENGINE

cope with price competition. To accomplish this, we will continuously strive to improve the manufacturing method, design, and reduce our cost. Focus on the development of a new product. To build the long-term progress foundation, the marine engines need to get smaller and more powerful, the engines for power plant need to be more environmentally-friendly, the high value added pumps for atomic power generation need to be developed, and the 11G LCD robot needs to be the focus of our robot development efforts.

If we work together to achieve our business goal despite this difficult situation, we will surely get a good result. Concentrate on strengthening sales special regions and developing countries. capacity. To increase A/S, we will intensify our Thank you. For this, we will focus on ensuring the global service network and broaden the quantity of orders by diversifying our new market of marine and industrial market, doing our best to receive an order pumps. Also the robot will pioneer the for the engine with the short-term delivery overseas market for our electronic LCD Yoo Seung-nam and components. Also, we will increase robot. Senior Executive vice president & COO our sales capacity for power plant in Intensify product competitiveness to Engine & Machinery Division

Two Marine Engines for Jinhaiwan Shipyard

n January 14, 2009 HHI-EMD held a signing ceremony Owith Zhoushan Jinhaiwan Shipyard Co., Ltd. of for the supply of two sets of marine propulsion engines (6S90ME-C8, 43,000 BHP) to be installed into 320,000-dwt class VLCCs for Frontline Ltd. of Norway. These two marine propulsion engines are scheduled to be delivered at the end of 2010 and the beginning of 2011, respectively. Including this order, HHI will have delivered a total of 17 sets of marine propulsion engines to the shipyard since the first order in August 2007. As one of the fastest growing Chinese shipbuilders with four drydocks, the yard is expected to continue to place orders for 6S90ME-C8 ENGINE marine engines with HHI based on a long-term supply relationship. 43,000 BHP

2 I HHI-EMD NEWS 2-STROKE DIESEL ENGINE

The safety ceremony for 2-stroke engine Over 5,000 sets of assembly shop #1-2 HiMSEN Engines on order

were present. lthough a worldwide economy This event was held to A slump, characteristics HiMSEN commemorate shop completion engine which was firstly developed by HHI- and raise awareness of safety. EMD in continued very robust growth. The construction work of the 2- HHI-EMD pass the totally of 5,000 orders stroke engine assembly shop recently. #1-2 began by removing the HHI-EMD received 19 orders HiMSEN existing building on February engine in 2001, 46 orders in 2002, 158 15, 2008. orders in 2003, 202 orders in 2004, 522 After that, HHI-EMD completed orders in 2005, 732 orders in 2006 and n February 10, HHI-EMD the installation work including the test 2,081 orders in 2008. Until last year, HHI- Operformed the safety ceremony facility on November 4, 2008. EMD received total 5,174 orders. That means commemorating the shop completion in Having a maximum capacity of annually growth rate have been double every year. the 2-stroke engine assembly shop #1-2 producing 140 engines (3.6 million that has recently been built. bhp), the shop will produce 84 sets As indicated by the market share which Yoo Seung-nam, the Senior Executive (2.08 million bhp) in 2009 and be changed 18% in 2005 to 32% power vice president & COO of HHI-EMD, and expected to contribute to the sales and generator have been popular, also. other employees from the department the supply of the high quality engine. The reasons for this wonderful growth rate are good fuel efficiency, easy maintenance and diversity scope which is from 575kW to Two-Stroke engine, presentation meeting with 10,000kW.

( Marine Engineering)

ast January 23, Engine Domestic Sales Department (General manager: Lee L Woo-kwan) and Two-Stroke Engine Design Department (General manager: Son Jin-rok) of HHI-EMD held a presentation meeting and had an opportunity to hear Voice Of Customer to build loyalty among customer base. On this occasion of visiting office of DSME, the countermeasures for IMO NOx TierII which is a hot issue in the shipbuilding industry today and for fuel pump sticking on low sulphur fuel oil were explained. Also DSME gave their various opinions for strengthen relations with HHI-EMD. In addition, Engine Domestic Sales Department and Two-Stroke Engine Design Department made a plan to visit the major shipyards, to which Two-stroke engines have been supplied, including DSME for about twenty times in the course of this year.

VOL.21 April 2009 I 3 4-STROKE DIESEL ENGINE

Successful Shop Test for the first Presentation of 9H32 /40P propulsion engine HiMSEN engine at

HI-EMD made a designer H education and presentation about new HiMSEN H32/40(V) engine in (SHI) on February 25 and March 4. According to an annual education plan of SHI, major machinery supplying companies he first Hyundai HiMSEN delivered on April 2, 2009 and shall visited SHI one after the other. T 9H32/40P propulsion engine be installed on 20,000dwt bulk carrier The education which was held on February successfully passed its official shop to be built at Jiangsu Huatai Shipyard 25 aimed improvement the skill of test at HHI-EMD in on March in Taizhou, China by a Chinese local employees who were under deputy section 27, 2009 under the attendance of the shipowner . chief. representatives from the shipowners Education includes HiMSEN engine’s and classification societies. With a successful delivery of the first specifications and systems in general, yard 9H32/40P engine in Chinese market, technology, and a trouble shooting. This The engine, Hyundai HiMSEN HHI-EMD will expand its sales market education paved the way for showing the 9H32/40P has been developed for of 9H32/40P engine toward Turkey, superiority of HiMSEN engine and initiating propulsion as Hyundai’s own Vietnam, India and etc. and will into the technology. developed model with a maximum enhance its position in the small and Designers who attended the education had continuous power of 4,320kW, which medium sized shipbuilding market as been familiar with MAN and Wärtsilä is substituted for 2-stroke engine world’s largest engine maker. engines but didn’t have the experience of such as 6S35MC. Besides, it is the HiMSEN engines. According to education, first engine of all type of 4-stroke they gratified themselves curiosity. engines which has “no damper” The education which was held on March 4 inside for torsional vibration by a introduced H32/40V which was newly practical design concept. invented. A lot of the concerned persons This engine was successfully who were in the purchasing department, the design department, QA and so on attended. And after concentrating on presentation they asked a lot of questions about specification of a diesel power generation and scope of supply. HHI-EMD will effort to receive orders and to support technologies for drill ship which will be built by SHI and DSME (Daewoo Shipbuilding & Marine Engineering).

4 I HHI-EMD NEWS STATIONARY POWER PLANT

Top Iraqi officials visit Engine factory

op officials from Iraq, including Nechirvan Barzani, T prime minister of the Kurdistan Regional Government, visited Hyundai Heavy Industries (HHI) in Ulsan on February 25. Prime Minister Barzani took a tour of the shipyard and engine factory with Humam Hammoudi, chairman of Iraq’s Constitution Review Committee, Karim Waheed Hasan, minister of Electricity, and 20 other senior government officials. “I hope HHI will take part in the Iraqi reconstruction work with their advanced technology such as oil exploitation, large construction projects and power transmission,” said Prime Minister Barzani, who expressed his confidence in the Packaged Power Stations (PPS) which HHI produced and installed in Iraq. HHI has exported a total of 180 units of PPS worth US$ 420 million to Iraq. The company expects additional orders of PPS from Iraq, and plans to participate in the Iraqi reconstruction business.

Successful Commissioning Test for NAMIBIA 10MW Packaged Power Stations

HI-EMD completed its official February 28, it has been providing conditions. H commissioning test for the stable electric power of 10 MW. PPS in Republic of Namibia, Africa. This project will serve as a bridgehead The successful completion of this for HHI not only to secure the possible As the fourth onshore turn-key power project will serve as a good opportunity extension of the project but also to plant projects of HHI in Africa on the for HHI to give publicity to its high export HHI’s power facilities for similar heels of the project in Malawi, this quality in-house brand HiMSEN engine power projects in southern Africa. project commenced last December to in southern Africa. HHI earned credit supply electricity to LANGER HEINRICH from its customers by successfully uranium mine in Namibia. With the constructing, commissioning and successful commissioning and delivering the plant in just three months handover of the PPS to the client on despite Africa’s hostile working

VOL.21 April 2009 I 5 STATIONARY POWER PLANT

PETROBRAS, visits HHI-EMD

etrobras, the Brazilian PPSs, The delegation also made the development of the deep-sea oil P state-run petrochemical a survey of the engine factory. field by 2013. company, visited HHI to introduce In line with this plan, the scale of their large-scale ocean project and Almir Guilherme Barbassa, the CFO placing orders including FPSO inspect the companies which are of Petrobras, said “I was very (Floating Production Storage related to the project. impressed by the fact that HHI is Offloading), drill ship, oil tanker, the world largest shipbuilding and supply vessel will reach US$ On April 21, Choi Gil-sun, the company, and also has the world’s 42 billion by 2017. president of HHI, guided the largest engine factory.” delegation that is comprised of This visitation of the delegation is Petrobras, BNDES (The Brazilian Brazil has established the policy expected to positively affect the Development Bank), and other that fosters the ocean and shipping promotion of winning the bid . brazilian companies to the industries after discovering a deep- machining shop exhibiting marine sea oil field. Brazilian authorities pumps, HiMSEN engines, and plan to invest US$17.7 billion in

6 I HHI-EMD NEWS STATIONARY POWER PLANT

Successful Test-run for Auxiliary Feed Water Pump for Nuclear Power Plants

n March 10, HHI-EMD successfully O conducted a test run of the Auxiliary The First Shipment of Feed Water Pump, which it had manufactured on its own technology. Iraq MOE 360MW DPP Project The Pump is the equipment which is subject to the strictest inspection during engineering and manufacturing processes because of its most HI-EMD announced that it demands for diesel power plant important function of rapidly cooling down the H has delivered an initial project in Iraq’s neighboring melting nuclear reactor under emergency shipment of engines for MOE countries in Middle East. conditions such as a black out or an earthquake (Ministry of Electricity) 360MW in nuclear power plants. diesel power plant project in Iraq on HHI-EMD has provided diesel February 11, 2009. generating sets more than Korea has imported Auxiliary Feed Water Pumps This is the first shipment of 144 1,600MW over the world as so far due to lack of the technology. However, units of diesel generating set received big orders from Iraq on the HHI-EMD finally come to successful test run of contracted with Iraqi government on back of Cuba and the clients first article, going through a hard time in getting June, 2008, and the delivery will be express their high satisfaction. HHI order and all the difficult processes from completed until June, 2009. EMD has a plan to strengthen the engineering through manufacturing stages under aggressive sales campaigns based severe nuclear regulations. The engines which are for 30MW x 3 on high performance and reliable Our first article was proved during the trial run to plants (36units) were arrived at Um- service. be more efficient and higher performance than qasser port. All 144 units of diesel those of overseas competitors and was given a generating set will be installed in 12 favorable reception by our customer. sites, central & south Iraq including Baghdad and a good solution for This success in the first article of the Auxiliary the rehabilitation of urgent Feed Water Pumps for Shin-WolSung #1,2 electricity power crisis in Iraq. HHI Nuclear Power Plants makes us prepare for the EMD expects it will trigger the increasing demands for the construction of Korean company’s participation in Nuclear Power Plants in the world, and helps us rehabilitation business for war-torn diversify our business and add to our sales economy in Iraq and increased volume as well.

VOL.21 April 2009 I 7 HYDRAULIC MACHINERY

Orders for 11 Ship sets of the Marine Cargo Oil Pumping System

ydraulic Machinery 2 Product Carriers (ANDROMETER, reliability of Hyundai marine pumps. H department of HHI-EMD has Italia), 2 Product Carriers (GEM, Arab Those customers who have recently received orders for the Emirate) Product Carriers experiences in operation of both marine cargo oil pumping system (PREMUDA, Italia), 1 Drill Ship (TPM, products of Hyundai and its including the cargo oil pump with Panama). Competitor prefer Hyundai Cargo Oil steam turbine, Auto Vacuum stripping Pumps. system, Water Ballast pump, and As well as marine pumps for Cargo oil stripping pump for 11 conventional Tankers and Product Since its debut in 1993, HHI-EMD ships. Carriers, Hyundai Pump recently has been awarded marine pumps for succeeded in making entry into the 276 ships in total as of 2009, through These orders are from Samsung market of special ships like drill ships its excellent technology and reliability. Heavy Industries in a single contract. and is gradually on the increase in the Now, it achieves a market share of These marine pumps will be installed market share. 70% in domestic and 40% in the in the vessels of APRAMAX class, world market, respectively, and the which consist of a wide range of ships Today, even ship owners from Middle brilliant feat of being nominated as and ship owners such as 2 Crude Oil East, who have preferred our one of topnotch products in the world. Tankers (Ship owner: YASA, Greece), competitor, admit technology and

8 I HHI-EMD NEWS ROBOT & SYSTEMS

232 ship sets of the Bow Thruster on order

ince the development of the on the sharp increase for the last three S HYUNDAI Bow Thruster on its years. own technology in 2006, Hydraulic As well as having supplied Thruster mostly Machinery Department of HHI-EMD has for the container ships, HHI-EMD expands been able to receive the orders for the Bow product line of Thruster by delivering wide Thrusters for 232 ships thanks to its range of the Thruster for Product Carriers, aggressive marketing campaign and LNG Carriers, RO-RO Carriers. excellent technology, and a total of 50 ship In early 2009, HHI-EMD extended its sets of Thrusters are in service. production and testing facility for HYUNDAI Thruster, which gives more HYUNDAI Thruster is given favorable flexibility to handle increased orders, and receptions in the market due to its set up Global Service Network to assist reliability and excellent performance, customers with better after sales service. which lead to a rush of orders from shipyards which have had difficulty being HHI-EMD is now making effort of supplied from few monopolies at stable marketing campaign for overseas market price and delivery conditions. The number on which European and Japanese of orders for HYUNDAI Thruster has been competitors have had a lock so far.

HA006C, Welding Robot System in mass production

HI-EMD localized the self-control H welding robot HA006C (10 axis) with automatic transfer unit for panel assembly in shipbuilding in corporation with the Robotics Laboratory and the Automation Laboratory. HHI-EMD started to produce these robots in large quantities by installing 16 robots in our Shipbuilding Division and 14 robots at Hyundai Samho Heavy Industries.

This equipment is use to weld panel automatically, the robot moved by work program (HOLP) which communicates with a controller having CAD data.

The benefits of the technology are threefold; a reduction of robot imports, increased productivity with automation in shipbuilding and expertise with robot technology.

VOL.21 April 2009 I 9 ROBOT & SYSTEMS CUSTOMER SERVICE

Order for 63 units of the 4th Generation Factory Training and Sports Event LCD GLASS for Overseas Repairer Companies Handling Robot HI-EMD Customer H Service Department(CSD) has built the Global Service Network to strengthen customer service for vessels and diesel power plants. Recently, Vietnam attended this training. 44 Service Repairer companies in They gave their impressions that major key ports and cities have they had been able to understand HI-EMD won an order for 63 units of the been registered on the network. HHI sincerely and to feel pride as 4th generation LCD Glass handling robots H The Factory Training for engineers a member of HHI-EMD Global in a newly installed the 4th generation Low- of these service repairer Service Network through the Temperature-Poly-Silicon (LTPS) manufacturing companies was held in HHI-EMD valuable training course. line. In cooperation with LG Display Company (LG to introduce and instruct about Furthermore, there was a bowling DISPLAY), HHI, within just 6 month, succeeded in HHI-EMD’s own brand products, event for attendees to become localizing LCD Glass handling robots which LG HiMSEN Engine, Side Thruster familiar with the CSD members. DISPLAY has relied on imports for all of its need. and Cargo Oil Pump. CSD also launched its new slogan; HHI has supplied more than 200 units of LCD The engineers from eight “Powerful Customer Service, Nice! Glass handling robots in 4th, 6th, and 8th generation companies in Germany, Canada, Nice! Nice!” to show they will fully LCD manufacturing lines to LG DISPLAY. HHI has Holland, U.S.A, Singapore and support and satisfy customers. made remarkable growth in the domestic LCD Glass handling robot field, recently accounting for about 30% of domestic market share. The friendly baseball game between trainees and Localization of LCD handling robots by HHI is expected to bring in benefits worth about US$ 20 million as import substitutes and a 10-20% DOLPHINS reduction in investment costs as well as swift HI-EMD the trainees of HiMSEN school and the Ulsan Dolphins technical support for users. H baseball team had a friendly game on April 18. Considering that a projected increase of LCD TV 60 people participated in the event and cheered the trainees, but the sales in China and other countries is going to DOLPHINS won the game 7 to 3. trigger additional investment in expanding and Currently, there are 15 trainees from Cuba studying the principles, operation, setting up new LCD panel lines, HHI will play a installation, maintenance, and technology concerning the HiMSEN engine major role for setting up new and high-technology power plant and packaged power plants until the end of May. LCD manufacturing lines through its continuous LCD robot development.

HHI has supplied more than 20,000 units of industrial robot for the auto manufacturing industry and has laid a solid foundation for the further expansion in the industrial robot market. With the firm establishment of the 4th through 8th generation LCD robots manufacturing system, HHI is well on its way to emerge as a world class robot manufacturer.

10 I HHI-EMD NEWS DPP, Turbocharger, Cylinder Frame, Nominated as a World Top Class Product 2008

Medium-Speed Diesel Power Plant This Diesel Power Plant uses an authentic HHI World Medium-Speed Engine (H17/28, H21/32, H25/33, or H32/40) as its prime mover, delivering 720-1000 rpm. Top-Class Products

2-Stroke Engine Cylinder Frame One of the core components of HHI’s 2-Stroke Diesel Engine, the Cylinder Frame can withstand the explosive power within the engine, transferring the energy to power the crankshafts.

Turbo Charger for 2-Stroke Engines A high-speed rotating compressor that provides pressurized air to each cylinder, increasing the engine power.

HHI-EMD World Top-Class Products (2001~2007) Since 2001, with the support of Korea’s Ministry of Knowledge Economy to promote the nation’s export, the World-class Product Award has been given to the domestic products which are ranked within the top fives in the global market, meeting the market volume of over US$ 50 million, or the export volume of over US$ 5million, or the global market share of over 10%. 2-Stroke Diesel Engine

2-Stroke Diesel Engine Crankshaft 4-Stroke Diesel Engine 4-Stroke Diesel Engine Crankshaft Cylinder Liner

Propeller Packaged Power Station Cargo Oil Pump Industrial Robot

VOL.21 April 2009 I 11 16H32/40V

9H32/40

Engine Sales Dept. 1, Jeonha-dong, Dong-gu, Ulsan, Korea Tel: +82 52 202 7281 Fax: +82 52 202 7427 Email: [email protected]