Korean trading firm acquires 51pc of a Qingdao shipyard to build small vessels South Korean trading firm Hyundai Corp has made its first move into shipbuilding by acquiring a majority stake in a shipyard in the mainland. The company will pay US$7.4 million for 51 per cent of Qingdao-based Lingshan Ship Engineering, in hopes of turning the facility into a modern shipyard for small to medium-sized tankers and bulk carriers. Hyundai has long been planning to diversify into shipbuilding, according to a company spokeswoman, and China, with its abundant supply of cheap labour, is an ideal place to invest. 'We felt the Chinese government is very favourable towards the shipbuilding industry,' she said last night. 'China is the world's third-largest shipbuilding nation. We expect the market to grow in the future.' Hyundai and Lingshan signed the deal on Thursday, in what is the first foray by a Korean trading company into the Chinese shipbuilding sector. Lingshan, with about 580 staff, covers an area of 300,000 square metres, including one dock of 10,000 tonnages and four slipways of 3,000 to 8,000 tonnages. After the acquisition, the shipyard will be used to build vessels of 10,000 to 20,000 deadweight tonnes, the spokeswoman said. Hyundai will manage the facilities by sending 30 managers and staff to China. 'It's a niche market. Not many companies care about building small ships of that size,' she said. The company will also make additional investment to modernise the facility in the long term, but she did not provide the details. 'We expect the shipbuilding industry to continue to bloom in the next seven to eight years.' Executives from Lingshan declined to comment on the deal yesterday, saying it was 'commercial secret'.