KOREA's Shipbuilding Industry - Current Status
The Korean shipbuilding industry is keeping up its position as the global No. 1 in terms of world shipbuilding market share. The position is earned through endless efforts to develop new technologies and methods, such as the fast development of IT, to enhance productivity and efficiency in the shipbuilding industry.
According to the new Korean Ministry of Knowledge Economy, Korean shipbuilders have received orders for ships totaling 12.4 million tons, or 50.6 per cent of global market share during the first half of this year. That is up from the 38.9 per cent market share of last year.
This year, the dominant trend has been massive VLCC orders. After just 34 VLCC contracts worldwide in 2007, VLCC orders counted 108 vessels as of September 2008. Among the total new VLCC orders (108 vessels) in 2008, 84 vessels (77.7%) have been secured by Korean shipyards.
Korea is focusing on building high value-added ships such as ultra-large LNG carriers and deep-water drilling rigs. Korea is the only country that can build Qflex (over 210,000 m³) and Qmax (over 260,000 m³) LNG carriers in a timely manner. Through the Qatar Gas Project, Korea’s three shipyards received 44 ultra-large LNG carriers during 2004 to 2006.
As for drilling rigs, Korea is the dominant player with a market share of 83 per cent of global deep-water drilling rigs. Nowadays, however, the drill ship is the new fashion instead of the conventional semi-submersible drilling rig.
Korea Mega Shipyards in World Top 10
Seven mega-size Korean shipyards capable of building VLCC were included in the World Top 10 Shipyards by Clarkson in June 2008.
Rank Country Yards
1 Korea Hyundai Heavy Industries Co.,
2 Korea Samsung Heavy Industries Co.,
3 Korea Daewoo Shipbuilding & Marine
Engineering Co., Ltd
4 Korea Hyundai Mipo Dockyard Co., Ltd.
5 Korea Hyundai Samho Heavy Ind.
6 Korea STX Shipbuilding Co., Ltd.
7 China Dalian Shipbuilding Ind.
8 Korea Sungdong Shipbuilding & Marine
Engineering Co., Ltd.
9 China Jiangnan Changxing
10 China Waigaoqiao S/Y
Source: Clarkson as of June 2008
Korea’s Global Shipbuilding Networks
As a global leader, Korean shipbuilders are expanding, establishing new global shipbuilding networks:
Hyundai Heavy Industries (HHI)
HHI operates its affiliate shipbuilders, Hyundai Mipo Dockyard (HMD), Hyundai Samho Heavy Industries (HSHI), and Hyundai Gunsan Shipyard (HGS) in Korea as well as Hyundai Vinashin Shipyard (HVS) in Vietnam. HVS is operated by control through HMD in Korea. Also Hyundai Qindao Shipyard is operated by Hyundai Corporation, an affiliate of Hyundai Heavy Industries.
Samsung Heavy Industries (SHI)
SHI has announced that it has signed a contract with Brazilian EAS Shipyard to acquire a stake worth USD 12.80 million, which is 10 per cent of the total investment in the shipyard. The signing enables SHI to hold a dominant position in terms of receiving orders for the total of USD 30 billion worth of drill ships and semi submersible drilling rigs that Brazil intends to demand. The acquisition will also enable SHI to generate new sources of profit, as it will earn royalty income from technology support and dividend income from stake acquisition.
Daewoo Shipbuilding & Marine Engineering (DSME)
DSME has been successfully operating Daewoo Mangalia Heavy Industries Co., Ltd. (DMHI) since 1997. DMHI located in Romania has been one of the most competitive shipbuilding, conversion & repair shipyards in the Black Sea area.
STX Group
STX Group, led by STX Shipbuilding, raised its stake in Norway’s Aker Yards to 88.4 per cent in August through a tender offer and would rename the company STX Europe ASA. With the launch of ‘STX Europe’ as momentum, STX Business Group has laid a cornerstone to having cruise ships and offshore sectors developed as key businesses. In this regard STX announced that it would promote its ‘specialization strategy by yard’ by selecting Norway, France, and Finland as its thre major strategic bases in Europe.
STX Group on April 5th said it has started operations at a USD 1 billion shipbuilding complex in Northeast China and will deliver the first complete vessel from the site by the end of this year. The Dalian complex will carry out the entire shipbuilding process – from steel cutting and engine assembly to block manufacturing. The Dalian facility already has USD 3 billion worth of orders, mainly for bulk carriers and pure car and truck carriers, or PCTCs and it expects to build about 24 ships a year from 2009.
Hajin Heavy Industries & Construction (Hanjin)
Hanjin signed contract with Philippine Subic Bay Metropolitan Authority to build new shipyards including block production in May 2006. The shipyard construction was successfully completed and it delivered its first container ship to a Greek owner.
Status of Korea’s Shipping
Korea has leaped to take the place as the world’s sixth largest country in terms of ship holding volume. Korea held ships worth 36.76 million DWT (1,063 ships) as of the end of January this year, ranking after Greece (175.711 million DWT, 3,087 units), Japan (160.722 million DWT, 3,433 units), Germany (94.513 million DWT, 3,189 units), China (83.064 million DWT, 2,975 units) and Norway (45.118 million DWT, 1,400 units).
Particularly, Korea has increased its ship holding volume by 15.9 percent over the previous year, jumping in the world ranking to sixth this year, up from eighth position a year ago.
Kormarine 2009
Kormarine is Korea’s primary trade show for the shipbuilding industry. This show is organized every two years in Busan. Kormarine is scheduled during October 21-24, 2009 at Busan Exhibition and Convention Center (BEXCO). Main products and services exhibited at this show are shipbuilding technologies; equipment, parts, materials and chemicals used in building or outfitting vessels; port machinery and equipment; safety systems, navigation and communications systems for ships, ports and naval. Kormarine would be the best choice for Norwegian maritime equipment suppliers who want to enter into the Korean market.
If you would like more information, please contact
Reidar Grevskott, Commercial Counsellor
Innovation Norway Korea
Tel.: +82-2-767-2650
Fax.: +82-2-767-2701
E-mail: reidar.grevskott@innovationnorway.no
Doo Seok Kim, Market Adviser
Innovation Norway Korea
Tel.: +82-2-767-2654
Fax.: +82-2-767-2701
E-mail: dooseok.kim@innovationnorway.no