Daewoo Mangalia back into the black after two years

After two years of heavy losses, Korean-based shipbuilder Daewoo Mangalia is back in the black, by taking advantage of the high demand for ships worldwide.
“We want to draw attention to the amount of red tape that one has to deal with when it comes to the local authorities, which are not involved in companies’ problems and, moreover, are hurting our productivity and jeopardising our development plans,” says Jae Bong Lee, general manager of Daewoo Mangalia Heavy Industries.
Daewoo Mangalia Heavy Industries (DMHI), Romania’s largest shipyard, turned a profit six months into this year, with 27 million dollars (20.4 million euros), after two consecutive years of losses. The company’s management estimates it will triple its profit next year, to 90 million dollars (68 million euros).
In 2005, Daewoo registered 18.5 million euros (67.1 million RON) in losses, and closed last year with 10.2 million euros in losses (35.4 million RON).
The shipbuilder managed to step back into the black despite the fact that 2,000 shipyard employees (out of over 4,000) went on strike for three weeks in June.
Daewoo Mangalia’s improving profitability is primarily due to a business boom, with the company’s management estimating profit to double in 2007, to 522.7 million dollars (around 396 million euros). Business was sustained by the extremely high demand for vessels, which increased prices by 20% during last year alone.
However, the Korean-based company has voiced concern over the rise in the price of raw materials and Romanian bureaucracy, as well as the lack of interest from the authorities, which could hinder their development plans.