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Korea Report - December 2005

Author : Hwang & Co Date : 06-01-09 09:18 Hit : 42947

Topics.

-National hero who developed stem cell turn out defrauded.
-Ruling Party passed the education reform bill in the absence of opposition.
-Korean protestors against WTO in Hongkong arrested.
-USA started economic sanction against N Korea.
-South and North Korea opened direct phone links across the border.
-Korea marked 3.9% GDP growth in 2005, expecting 5% in 2006.
-The freight of TSR goes up 30% from 2006.
-Hyundai Group prepares to buy back Hyundai Construction.
-Korean contractors broke $10 bil order for overseas constructions.
-KOSPI continued the unprecedented rally renew every record in the market history.
-Kwon strengthened with indication of USFRB’s indication no further rate raising.
-SK Group acquired Inchon Oil Refinery.
-KS Choi of HHI and WJ Jang of STX returned to their original home.

GOVERNMENT AND POLICY

The national hero, who made world headlines by developing stem cells tailored to individual patients, turned out a coward defrauder. It started by a brave TV program, when the most scientists took the case as taboo, insisting it makes no sense to question the validity of Hwang’s research because it was rigorously examined by authoritative scientists before being published by international journals. "PD Notebook," on MBC TV network raised suspicions about ethical improprieties in Hwang Woo-suk's studies, reporting that he used ova from his junior researchers and paid donors. MBC further reported that some of Hwang's patient-tailored stem cells may not have been derived from embryos created with human eggs and somatic cells from patients. MBC TV network has faced its biggest crisis after triggering a bombardment of public criticism and fire from all sides of the country, following its report to belittle Hwang’s achievement. MBC has been severely pounded by citizens, politicians and scientists, and, the worst of all, all sponsorship for the network has been disappeared. MBC was forced publicly apologized for violating journalism ethics, after 2 researchers from Hwang's team said the producers of the program used coercion, manipulation, and hidden cameras in order to secure recorded interviews unfavorable to Hwang. But finally they were found right.
Hwang, a veterinary professor at Seoul National University (SNU), made world headlines in May 2005 by developing 11 stem cells tailored to individual patients, paving the way for the development of therapies for hard-to-cure diseases without fear of rejection by people's immune systems. However, his junior researcher revealed that Hwang had asked him to make up 11 different stem-cell images out of 2 cells for publication purpose in Science journal. The internet groups of scientists also said some DNA fingerprints of different stem cells in Hwang's paper are similar, further questioning the authenticity of the stem cells. Critics have begun screening for irregularities in Hwang's past achievements which include the pioneer cloning of a dog, "Snuppy" and human embryos.
Hwang requested retract his research published in the journal Science after admitting to serious mistakes made during the production of stem cell photographs supporting his work. He claimed that his 5 stem cells were switched with ordinary cells and that a state prosecutor's investigation into a sample swap would reveal the truth "within a couple of days." He still defended himself insisting that he has the source technology to produce tailored embryonic stem cells and replicates the process any time. After "PD Notebook" broacasting, he offered to step down from all official positions, admitting to ethical impropriety in his research published in June 2004.
SNU appointed a committee consisting of 7 SNU professors and 2 outside experts, to investigate the authenticity of Hwang's work on stem cells. The SNU panel announced in its interim report that Hwang faked all but 2 of his stem cell lines, and that further experiments are underway to determine whether the remaining 2 are genuine. The panel said that patient-tailored stem cells Hwang claimed were not patient-tailored stem cells, but ordinary stem cells taken from a fertility clinic. Hwang's significant works - the world's first cloned stem cell and the world's first cloned dog Snuppy - are being tested through DNA analyses as well. The results will be announced in their final report scheduled in Jan.
The journal Science deleted Hwang's stem cell research paper from its list of top 10 breakthroughs in 2005. Science is reviewing Hwang's other paper in 2004 which produced the world's first cloned human embryo.
The nation fell into disbelief and shock following allegations that ground breaking stem cell research could be fake. The presidential office and politicians, who have been supporting full-fledged as one of the nation's flagship projects, were devastated upon the news. Hwang's fan club "I Love Hwang Woo-suk" were probably those most devastated. The Web site pages were overflowed with the words of "not to give up hope" Korean stocks plummeted led by drug companies. The government, who has poured some $40 mil into his research since 2002, withdrew its planned funding and considers cancelling its appointment of Hwang as the top scientist in Korea.

Japan's Prime Minister reiterated that he has no intention to stop visiting a Tokyo war shrine despite criticism from Korea and China, persiting the issue to be understood in the long run, and no affect Japan's growing economic ties with its Asian neighbors. China refused to hold the regular summit among Korea-China-Japan in parallel with ASEAN + 3 summit, indicating their discontent with Japanese PM's visit to Yasukuni Shrine. China also cancelled the regular "Shuttle Summit' among 3 countries at the end of the year.

The ruling Uri Party, having won support of 2 minor parties, was firmly set to pass the education bill, one of its four flagship reform measures. The law requires private schools to elect a quarter of their seven-member board of directors from among faculty members and parents, intending to ensure more open and transparent management of private schools. According to the statistic, in about 53% of around 2000 private schools, relatives of the school owner dominate the board of directors, the faculty and administration staff.
The opposition GNP argued the measure would infringe upon the independence of private school foundations, boycotting all parliament proceedings for almost 3 weeks, opting for protest rallies in the streets to demand the nullification of the school law revision.
The school owners, principals, parents and a student, filed a petition with the Constitutional Court, to stop the legislation which they say would infringe on the independence of private education foundations. About 350 Catholic middle and high schools across the country announced that there will be no new recruitments for the academic year 2006.

The parliament, on the ruling bloc bulldozed during GNP’s boycott, approved a total of 20 bills including the delayed budget plan that sets the government's spending for the fiscal year 2006 at KW144.8 tril. The parliament also endorsed a motion seeking to extend the deployment of Korean troops to Iraq by one year, calling for reducing the number of the troops by 1,000. A package of tax measures designed to back up the government's tough antispeculation policy on the real estate market was included in the last-minute flurry.

Protesters opposed to lowering trade barriers swung bamboo sticks at Hongkong police and tried to storm a convention centre where WTO delegates were negotiating a global accord on farming, manufacturing and services. Hong Kong Security forces scattered the crowd with tear gas and pepper spray, and detained a total of 1,149, of which 1,001 were Koreans, after the worst street violence in Hong Kong in decades. The 70 injured included 10 police officers. The police arrested 11 demonstrators from Korea to put on trial, while others are released.
President Roh Moo-hyun apologized for the deaths of 2 farmers caused by a clash with police during rallies against the government's opening of the rice market. Police chief Huh Joon-young apologized for the tragedy and very reluctantly resigned from the post, being succumbed to the pressure from civic and political sector to take responsibility for the incident for which President Roh made a public apology.

The Seoul High Court overruled a lower court's ruling earlier in Feb that ordered the government to scrap or modify the Saemangeum project aimed to turn 40,100 hectares of tidal flats into farmland and a freshwater reservoir by building a huge seawall in West Sea, supporting environmentalist's claim that the project could harm the environment and its economic benefits are not guaranteed. The plaintiffs, including environmental activists and about 3,500 local residents, plan to appeal the ruling. The central and local governments welcomed the decision and vowed to push ahead with the project. The government has so far poured over KW1.7 tril into the venture from 1991. The Saemangeum dike is now about 92% complete after almost 15 years of on-and-off construction.

With an average life span of 80.82 years which beat the 80.6 average female life expectancy of OECD, Korean women live almost 7 years more than men whose life span reached an average 73.87 as of 2003.
50.1% of the Korean female population engaged in economic activity during the first 10 months of the year, signaling that men as sole bread winners is becoming a thing of the past.
Korea’s population increased by 2.4% during the past 5 years to total 47.25 mil as of Nov 1.

NORTH KOREA AND NATIONAL DEFENSE

The new U.S. ambassador to Korea started the battle of words against NKorea, saying that USA will not lift sanctions as a political gesture on a "criminal regime" that engages in large-scale illegal activities. He also said "Despite our best efforts and intentions to engage with NK, we cannot turn our faces away from the fact that NK remains a military threat with over a million troops, and claims to possess nuclear weapons." President Bush called to change the regime of terrorist and NK is the country to starve the people. US special envoy for NK’s human right insisted to openly discuss the human right matter even though it makes NK's regime angry. USA suspended transactions with a bank in Macau for allegedly aiding the passage of counterfeit money and working with NKorean companies trafficking in drugs. In addition to suspending shipment of the remainder of its scheduled food aides to NK, USA froze the assets of 8 NKorean companies that, it claimed, helped proliferate weapons of mass destruction.
NK said it was impossible for them to resume the six-party talks under such a "financial sanction that betrays the agreement of principles." It reaffirmed its possession of nuclear arms, claiming they are a "necessary" and "legitimate" measure to defend itself from what it called US pre-emptive nuclear attacks against it. SKorea expressed concern over US Embassador’s heavily loaded descript-xion of NK when it is critical to maintain the momentum of the nuclear negotiations. Seoul urged Washington and Pyongyang to clear up their financial conflict to let the six-party talks move forward towards the ultimate goal.

The Defense Ministry has picked Eurocopter, a Franco-German consortium, as a main foreign partner in a $1.1 bil project to develop new multipurpose helicopters. Eurocopter beat US Bell and British-Italian AgustaWestland. The company is to supply a platform and key technologies to help the nation develop 6 sets of prototype choppers by 2011. The project is aimed at replacing aging US helicopters which were brought in the 1970s, as well as building up Korea's own aerospace industry and self-reliant defense capability. Mass production is expected to begin only after 2011.
2 F-15K fighter jets arrived in SKorea when the second batch of 40 aircraft due from US Boeing is delivered under a $5 bil deal.

South and North Korea opened direct commercial phone links across the border for the first time in 60 years. The phone service is expected to help cut communication costs for SKorean companies in the industrial park located in NKorean border city of Gaeseong, otherwise they have to communicate via Japese station. It will also lay a foundation for boosting inter-Korean cooperation in information technology.
The Army has successfully achieved its target of removing landmines scattered across an area near the border with NK. The Army removed 4,263 landmines planted in around 5 air defense units and cleared a 98,500 sq meter area in the southern side of the civilian passage restriction line during 8-months of work. SKorea estimated to have about 1.2 mil landmines throughout the country.
Inter-Korean trade is expected to surpass $1 bil this year for the first time as a result of the Gaesong industrial complex in NK. The trade surged 57.7% on year to $978.6 mil in the Jan-Nov period.

ECONOMY AND POLICY

Government targets 5% economic growth in 2006, supprted by broadening recovery in domestic demand coupled with brisk exports. Korea posted a 4.4% GDP growth in the third quarter, following 2.7% expansion in the first and 3.3% in the second. China, Korea's largest trading partner, grew 9.4%, India 8%, Singaporean 7%, Hong Kong 8.2%, Malaysia 5.3% and Taiwan 4.4% in the third quarter. The Korean economy is expected to grow 3.9% this year.
Korea's industrial output in Nov rose 12.2% from an 8.2% in Oct, at the fastest pace in 10 months, driven mainly by exports and consumer spending. Consumer sentiment rose to 94 points in the fourth quarter from 87 in second quarter, gaining enough momentum to sustain the economy.

Korea's exports of digital consumer electronics products rose 11.2% on year to a monthly record of $9.83 bil in Nov, marking the third straight month of new records. Exports of general machinery topped $20 bil to $20.14 bil, as of late Nov this year, emerging as one of the country's major export items, expecting shipments for the year to total $22.22 bil.
Korea's agricultural trade deficit widened to 4% on year to $7.97 bil in the first 10 months of this year. Agricultural exports amounted to $1.79 bil, up 7.9% on year, while imports were up 5.4% to $9.76 bil. Steel imports will record a new high this year due to a surge in imports of Chinese products. Imports in Jan-Nov period rose 8.1% on year to 17.4 mil tons, over 41% of which were from China.
EU has replaced USA as Korea's second-largest export market after China. Korea's exports to USA were worth $36 bil for the year to Nov 20, down 3.9% on year, while its shipments to EU rose 16.9% to $38 bil.
As the freight of Trans Siberian Railway goes up 30% from 2006, traders feared serious damage on their competetiveness. For instance, they expect it causes 5-10% cost hike for a refrigerator. TSR handled 150,000 TEU in 2005.
Korea's current account surplus narrowed to $2.1 bil in Nov from 9 month high $2.8 bil surplus in Oct.

The prosecution questioned the chief executive of Hermes Investment Management, on suspicions to manipulate and boost Samsung Corp's stock prices in 2004 by suggesting the trading company was a takeover target, shortly before selling the shares, and earning KW29.2 bil in the process, while Hermes has denied the allegations.
Lone Star Fund has promised to pay the taxes levied on it in full, apologizing to the nation's tax authority for its uncooperative attitudes against the tax probe and tax levies.
Microsoft has been ordered by Korean Fair Trade Commission to pay a fine of $32 mil and make available a version of Windows stripped of its instant messenger and Media Player programs in future sales. Microsoft is to appeal the ruling.

Korean EXIM Bank is to loan $22.3 mil to the Philippines to help the country improve its road system between the cities of Manila and Subic in times of flooding.
Hyundai Capital issued the ABS worth eu330 mil, with the maturity of 52 months on Euribor+15bp, obtaining `Aaa` and `AAA` credit rating from Moodys and S&P respectively.

Korea's total energy consumption was forecast to reach 237.1 mil tons of oil equivalent in 2006, up 3.5% from this year. As the oil price reached a record high this year, the country is expected to spend the aggregate cost for crude oil imports during Jan-Nov period, reached some $38.7 bil, up over 40% on year.
Daewoo International secured a large-sized gas reserve in Myanmar, which was officially certified by Ryder Scott, who evaluated the reserve of its A-1 offshore gas field to range 2.88-3.56 tcf, equal to around 0.6 bil barrels of crude oil. Holding a 60% stake in the gas field, it has been exploring the project jointly with KOGAS and 2 Indian oil companies. The company is to invest $120 mil in other neighboring gas exploration projects over the next 10 months. Korea Mineral Exploration Corp and LS Copper Refineries jointly discovered large scale copper mine in Peru with estimated reserve of 400 mil tons. The production will start from 2009.
Korea Electric Power (KEPCO) took 5% stake in Newpack coal mine in Australia, securing the right to purchase a mil tons of coal a year during 2006-2025, after investing $20.4 mil.

CHAEBOL

Korea dropped to 13th among the 37 leading nations in the brand value of countries, with a estimated $594.7 bil, one notch down from last year.
13 companies made the KW1 tril net profit club, same number in 2004. The list are Samsung Electronics (SEC), POSCO, Korea Electric Power Corp (KEPCO), Hyundai Motor (HMC), SK Telecom, Woori Finance Holdings, Shinhan Financial Group, SK Corp, Hynix Semiconductor, and KT Corp, with the newcomers, namely Kookmin Bank, Korea Exchange Bank and LG Card.
Buisiness Week published "Global 1200" which ranked SEC 32nd with the capitalization of $100.3 bil, Kookmin Bank 273rd, HMC 277th and HHI 967th, while GE and ExxonMobile kept 1st and 2nd with $377.4 and $361 bil, respectively.

SEC clinched more than a 11.1% share of the global TV market in the third quarter in terms of sales. Matsushita Electric was second with 10.1%, followed by Phillips 9.5%, Sony 8.3% and LG Electronics (LGE) at 8.2%.
Booze Allen Hamilton ranked SEC 17th in research and development spending with $4.32 bil among the world's 1,000 most innovative public companies in 2004. Microsoft topped R&D budgets at $7.77 bil, followed by Pfizer at $7.68 bil and Ford at $7.4 bil.
SEC has signed an agreement with Venezuelan cable TV Omnivision for the supply of WiBro handsets, Korea's home-grown portable internet platform, whose services will start from the third quarter 2006. SEC is to sell NAND flash memory chips to Sony, under-pinning expectations for surging demand for the chips. SEC has signed a big supply deal to provide $448 mil worth of electronics products to the Shanghai-based chain Guomei Electronics.

Hyundai Engineering & Construction (HEC) accepted notification of Iraqi government to repay only 20% of the cost of past construction projects in Iraq tied up since the first Gulf War in 1990, worth $331 mil of the principal and $350 mil of outstanding interest.
Hyundai Group is to set up a task force to buy back its former flagship unit HEC from creditor banks. The acquisition is expected to be the group's major goal for 2006 as it aims to reach annual sales of KW20 tril and to become one of the nation's top 10 conglomerates by 2010. Currently, KEB, KDB and Woori Bank each control 17.79%, 16.73% and 14.59% stake in HEC, respectively.

The biggest share holder of LG Phillips has been changed from LGE-Phillips to LGE, after Phillips sold 18 mil share, lowering its stake from 37.9% to 32.9%. Carlsberg, second largest share holder of Hite Beer sold out 11% out of its 25% stake in the breweries.

Korean Air won the order from Spirit Aero System to supply $300 mil worth the noze wheel of B787. The company secured $500 mil contract in total in its order book.
Mando Corp signed a $125 mil deal to supply electric power steering systems to Russian car maker AutoVAZ for 5 years from 2007. Mando won $215 mil deal from Chinese carmakers including SGM, $386 mil from GMC and $68 mil from Ford Motor.
The Korean National Railroad has chosen Rotem as the preferred bidder for its bullet train procurement project worth KW300 bil.
Korean set-top box maker Humax has signed a $73 mil contract to supply its digital set-top boxes to a German broadcasting company.
Hyundai Image Quest agreed with Russia's HMM to export $43 mil worth displayer units, including 185,000 LCD monitor and 15,000 units of LCD TV for next year.

Doosan Heavy Industries & Construction (DSIC) won a $850 mil deal to build the world's biggest desalination plant of 880,000 ton capacity in Shuaibah in Saudi Arabia, for the completion in June 2009, to supply fresh water for 3 mil people per day. DSIC continues to command 40% share in the global desalination market. 3 units of 917 megawatt thermal power generators will also be built by Doosan to supply electricity to nearby Mecca and Medina.

SK Corp has acquired bankrupted Inchon Oil Refinery for a total of KW1.6 tril, boosting its daily refining capacity to 1.11 mil barrels from the current 840,000 barrels, and emerging as one of the major refineries in the Asia-Pacific region.
KT Corp, Korea's largest fixed-line and broadband operator, is set to invest KW3 tril next year, the largest since its privatization in 2002, to strengthen newly emerging businesses like portable internet and digital content.
Japan's NTT DoCoMo is in final talks to buy a 10% stake in Korea’s KTF, a wireless unit in which KT holds a 48.7% stake for $420-500 mil, as Japan’s top mobile carrier seeks new avenues of growth.

GM Daewoo Auto began construction of its fourth knockdown packing facility at Incheon in cooperation with Hanjin Transportation and Korea Express, which is slated to begin operation in the second half of 2006 with the capacity to pack and export 570,000 kits annually. With the new facility, GM Daewoo's annual KD export volume will reach 1,420,000 kits.

POSCO recorded 29.9% profitability, the highest among the nation's top 10 businesses in the first 9 months of the year. POSCO settled the plan to build an integrated steel mill with the capcity of 4 mil tons in India at first stage by 2010. It has already signed another MOU to build 12 mil tons capacity of steel mill in Orrissa.

Korea's contractors broke $10 bil level in the order for overseas construction contracts, for the first time in 8 years, thanks to booming Middle East and the devolopment of new markets in China, India and Africa.
Daelim Ind has won a contract from Saudi's Sahara and Basel for the construction of $610 mil worth petro chemical plant, jointly with Italy's Technimont, for the completion by Nov 2008.
KEPCO held ground breaking ceremony for 200KW thermal power plant in Sebu Philippine, for the commercial sale electricity from 2009. It also signed a MOU to buy 40% stake in Naga Power station to actively participate the operation of the station. KEPCO agreed with Philippine government to expand the capacity of Llijan Power Station from 1.25 mil to 1.85 mil KW. When completed, KEPCO's share in Philippine's eletricity market will grow to 18.9%.
GS Construction secured the $350 mil contract to construct Linear Alkyl Benzene plant for Egypt.

MONETARY AND ECONOMIC INDICES

KOSPI continued the unprecedented rally renewing its every record in Dec, despite slow NYSE, BOK's raise of its bench mark rate and rising oil prices. It started the month from 1305, breaking past 1,300 for the first time in its history and ended at 1379, encouraged by all-time monthly high export and favorable balance between supply and demand. It is surprising leap as KOSPI was hovering below 900 at 895 at the end of Dec 2004, lifting the aggregate value of listed stocks from KW411.4 tril at the end of 2004, to KW650 tril as of end 2005, up more than 55%.
KWon has been strengthened from 1134 to 1005 against USDollar through the month, with FRB's indication of no further rate raising. Korea’s foreign reserves rose $2.16 bil in Dec from Nov to reach $210.39 bil.
BOK raised the policy interest rate to 3.75% for Dec from 3.50%, for the second time in 3 months, to pre-empt inflationary pressures spurred by an economic rebound, surprising many analysts who had speculated BOK would hold off further increases until early next year. US Federal Reserve raised the benchmark interest rate by a quarter point to 4.25%, for the 13th consecutive time, but signaled a possible end to its campaign of rate hikes. The yield on 3 years corporate bond was stabilized in the box of 5.37-5.69%.
Consumer prices in Dec rose 2.6% on year to record a third consecutive monthly increase, hinting that prices may rise further as the economy picks up pace. Korea’s jobless rate fell to 3.3%, a 26-month low in Nov, on the back of an increase in hiring by the service and financial sectors.

SHIPBUILDING AND SHIPPING

7 Korean Shipbuilders, such as HHI, SHI, DSME, HMD, Samho, Hanjin, STX are included among the worlds top 10 in terms of orders received this year. Korea secured combined orders totaling 13.9 mil CGT this year, accounting for 42% share of the global shipbuilding market, compared to Japan's 5.9 mil CGT. Korea's Big 3 recorded the highest record in receiving order in 2005 totalling $25.4 bil, thanks to high valued ships, such as LNG carriers, offshore facilities and super container ships. The profitability of Korean shipbuilders will likely be better in 2006, mainly due to higher contract prices, improvement of productivity and lowered steel prices.
Owners are holding back as they find it difficult to justify their investments at current prices quoted by yards. General view on new building market indicates the prices to come down, but how much and how soon remains to be seen. Sale activities of Korean yards were slow in Dec, probably reflecting owners' fears of falling freight rates.
In addition to the boom in large shipbuilders, small shipyards, as well, are very successful in securing orders. Samho has specialized itself as the builder of 12.8K chemical carrier, Daehan 10K MPP, INP 10K stainless steel chemical/ ethylene carrier. Nokbong and 21st Century to be active to secure the orders.

KS Choi returned to HHI as CEO President from HMD and KH Yoo resigned for private reason. JB Song, SEVP of HHI, promoted to President of HMD and SH Kang, SEVP of Samho, became the President of Hyundai Samho. HHI also announced year end promotion, including DY Han to SEVP, HR Cho of Tokyo office toVP, SC Chung of New Jersy/JS Yang to director, SI Hong of Hongkong/HJ seok of Oslo to acting director. CG Kim of HMD went up to SEVP, and TB Lee of Hyundai Samho to acting director.
HHI secured order from Solvang for 2 x 60K LPG carriers, NEU 3 x 60K LPG and Western Petroleum 2 x 115K coated tankers. HMD got 5 x 47K PC.
DSME received order from Wallenius for 4+2 x 8000 PCTC and VELA 6 x VLCC. DSME has ordered a new goliath gantry crane with a hoisting capacity of 900 tons manufacturered by KCI Kone for the delivery of Nov 2006, costing EUR15m. DSME cancelled an order for 2 x semi-submersible drilling rigs from Frigstad Offshore, because owner failed to pay in time.
SHI had Chandris for 2+2 x 115K coated tankers. SHI agreed with China's Bao Steel for the supply of 100,000 tons of shipbuilding steel from 2006.
STX targets $5.3 bil in exports. STX contracted with Pietro Barbaro for 3 x 51K Ice 1A PC. STX Board decide reshuffling of its management. WG Jang will stay in Chinhae in charge of Machinery manufacturing and Shipbuilding activities and SK Kim is transfered to Seoul as CEO of STX Corp to take care of Trading and S&P.
Sungdong made a contract with Seyang for 2 x 73.8K PC. Samho increased order to 6 from Blystad by adding 2 more 12.8K chemical carrier. INP had Tamba Kisen for 1 x 10K ethylene carrier.
Jindo made a contract to supply 7500 boxes to MOL.

Since established London local corporate office, STX Pan Ocean has strengthened its activities in Atlantic Ocean, making it as one of dual axis with Pacific route. STX opened 4 local corporate, such as Singapore, Hongkong, Shanghai and London this year. STX aims $500 mil sale by 2008.
HMM is to pay a dividend this year, for the first time in 6 years, as business surroundings has been greatly improved. HMM took the delivery of a 310K VLCC, Universal Crown, from HHI, and put her immediately to the Mid East Route. It was the second VLCC it received this year.