Busan-based “Marine Equipment Giant” PANASIA reports phenomenal KRW 150 billion in exports to Europe and China 

On the 19th, in Shanghai, China, Soo-tae Lee, CEO of PANASIA (fourth from left), signed supply contract for marine de-SOx scrubbers with Chinese shipping group CSSC and Swiss shipowner MSC / Photo courtesy of PANASIA. 

PANASIA (CEO Soo-tae Lee), located in the Mieum Industrial Complex, Busan, has achieved remarkable success in international markets with eco-friendly marine equipment it developed using its own technology. 

On the 20th, PANASIA announced that, in Shanghai, China, it had signed a contract worth KRW 150 billion with Chinese shipping group CSSC and Swiss shipowner MSC to supply de-SOx scrubbers for 29 vessels. A rep for PANASIA said, “We were able to win this contract because of our efforts that started 20 years ago. We developed a de-NOx scrubber system for marine and offshore applications, and continued to strengthen our technology while delivering those scrubbers for ships and offshore combined cycle power plants. Since 7 years ago, we have done numerous tests and invested a significant sum in de-SOx scrubber systems. Consequently, we now provide high quality and have our own reliable technology.”

He continued, “We optimized and made the device lighter based on the properties of the vessel to set ourselves apart from other companies. The de-SOx scrubber system with improved performance using information and communications technology (ICT) has gotten good reviews from customers.”

Faster delivery than its competition also helped PANAASIA win the contract. Through continuous production facility investment, PANASIA developed a system that allows it to deliver in eight months after signing contracts. The system helped PANASIA reduce lead times by half while its competitors took over 16 months. On July 10, PANASIA signed a supply contract for de-SOx scrubbers with Greece’s second largest shipowner TMS Group. The contract is worth 72 million dollars for installations on 53 vessels.

CEO Soo-tae Lee stressed, “We won such a large contract amid the long recession the shipbuilding has been suffering. So this is definitely great news. The fact that we won this large contract will have a sort of trickle-down effect, creating more jobs for secondary and tertiary suppliers; it will boost local economic growth and help create jobs.”

Through this contract, PANASIA reported a record KRW 85.1 billion in revenue in 2015, projecting that the company would recover lost revenue, from 44.9 billion last year to 75 billion in sales this year.

CEO Lee said, “We keep getting more inquiries about orders from shipowners. We are expanding our production facility at the Busan headquarters, and building a plant in Jinhae, Gyeongsangnam-do, to increase our production capacity for de-SOx scrubbers.”

The International Maritime Organization (IMO) stipulated that the allowable limit on sulfur emissions from ship engines be reduced from 3.5% to 0.5% or less to prevent air pollution, starting on January 1, 2020. Ships must install systems for reducing sulfur content to operate at international ports. De-SOx scrubbers are applied to both new ships and currently operating ships, which accounts for a global market of KRW 180 trillion.

CEO Lee asked the “government should take the initiative in providing funding and refund guarantees (RG) for advance payments for marine equipment suppliers” because this contract presents “a great opportunity for the shipbuilding industry to recover, but we still have difficulty raising money to cover huge production costs.”

hyun@hankyung.com