Feature 1 | CHINA Shipbuilding evolution Korean investment in Chinese yards gives the shipbuilders a variety of options K
orea’s biggest yards all have investments in China – to differing scales of success. Many started
out as block builders, sending giant steel structures across the Yellow Sea for final assembly at home yards in Korea, making the most of the cheap labour costs on offer in the People’s Republic. Koreans were generally unwilling to
upgrade their investments while an old law prohibiting foreign firms from majority stakes in shipbuilding yards in China remained in place. Once this law changed two and a half years ago there has been a sea change in the scope of investments. Samsung Heavy Industries (Ningbo),
a hatch cover and block manufacturer in China, this June entered the newbuilding market. Samsung-Ningbo started construction of a
17,000dwt heavy-liſt carrier, ordered by S&P Marine, due for delivery in mid-2013. A spokesperson from Samsung said
that Samsung-Ningbo is capable of constructing eight newbuildings a year, and will focus on 50,000dwt medium range product carriers, handymax bulkers, PSVs, and feeder boxships. Samsung has two block building sites
in China, one in Ningbo and the other in the Yangzte River delta. It made tentative steps to offer mid-sized bulkers and tankers around two years ago, but this June order marks a debut in the People’s Republic for the Korean conglomerate. The Ningbo yard will continue to
manufacture hatch covers and blocks as well unless demand for newbuilds dramatically picks up. Going in the other direction however
is Samsung’s rival Daewoo Shipbuilding & Marine Engineering (DSME). Yantai- based Daewoo Shipbuilding & Marine Engineering (Shandong), also known as DSSC, has come full circle. It started out as a block builder then, in March 2011, it announced it had won its first ship order, a pair of 58,000dwt bulkers. However, this was as far as DSSC went
for newbuilds as the market turned against them. This June it announced it would
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STX Dalian’s Changxing Island site covers an area of over 5.5 million m2 claim to being the largest shipyard in the world
, and can lay
cease to market newbuilds and would henceforth focus on its original purpose – building blocks. Then there is Qingdao Hyundai
Shipbuilding (QHS) which was founded as a joint venture involving Hyundai Corporation in 2005. When this company ran into financial difficulties a couple of years ago, Hyundai Heavy Industries (HHI), which confusingly is not related to Hyundai Corporation, stepped in to take over the yard in February 2010. Te shipyard, minute in comparison to HHI’s 10-dock facility in Ulsan, Korea, focuses on small multipurpose vessels and product carriers and has racked up a sizeable orderbook. All these shipyards mentioned thus far
are small in size, offering ship types that their bigger Korean parents would not deign to build on home soil as they are too small, yet provide an alternative, niche source of income. In the far north, however, is the biggest Korean investment by far. Located on Changxing Island, and stretched over 5.5 million m2
of space is STX
Dalian, which by area alone can lay claim to being the largest shipyard in the world, also can boast one of the world’s biggest drydocks and 5km of quayside. Te yard, which started in 2008, builds bulkers, car carriers, product tankers and has latterly taken orders for small boxships too as well as furnishing STX’s Korean yard with blocks and engines.
At the end of June STX Dalian won a
bumper contract to build 10 containerships of 5,000TEU each for Zodiac Maritime Agencies. The European shipowner is paying
US$45 million for each vessel and deliveries will be staggered through to the end of the third quarter of 2014. “STX will continue to develop its yards
with a policy of Korea taking the high-tech orders and Dalian producing greater numbers of more basic ship types,” explains an STX employee in Seoul. Finally, in a big reverse in how shipbuilding
evolution has worked so far there is a strong possibility a Chinese firm will invest to build a shipyard in South Korea. China’s Qin Long Group is looking at entering into a tourism business as well as shipbuilding in South Gyeongsang Province, South Korea. South Gyeongsang governor Kim
Doo-Kwan paid a visit to Beijing in June in order to draw investment. Governor Kim met with Qin Long’s president Li Xiao Ming and asked him to invest in South Gyeongsang’s tourism and shipbuilding industries. Governor Kim also invited president
Li to South Gyeongsang Province and President Li is scheduled to visit Korea soon to have a look around possible investment sites. Kim said that: “President Li seems to have a strong will
to advance into
investment in the shipbuilding industry in South Gyeongsang province.” NA
The Naval Architect September 2012
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