According to the Korea Times, the next five years will provide an opportunity for Korean shipbuilders to construct cruise ships with a high-profit margin, the Korea Shipbuilders' Association said.
The construction of luxury cruise ships declined steadily after the September 11 terrorist attacks on the United States. But with a recent favorable upturn, the market is expected to expand especially in the large and medium-size category through 2010, with an annual growth rate of about 5 percent, the association said.
This prospect of stronger demand for cruise ships will offer local shipbuilders opportunities to venture into the construction of cruise ships with less risk.
South Korea is the no.1 shipbuilding country in the world with aggregate exports of $17.6 billion last year. However, Korean shipbuilders haven't seen significant sales in the cruise ship business, which accounts for about 20 percent of the global shipbuilding market.
Until recently, Europe had almost completely monopolized the building of cruise ships. According to the Association of European Shipbuilders and Ship Repairers
, a quartet of Europe-based shipbuilders that has maintained a combined 84-percent market share since 2002.
The average age of cruise ships in service at present is about 42.4 years for 19 ships over 10,000 gross tons, and 37.8 years for those less than 10,000 gross tons. Accordingly, replacement demand is likely to become active in the near term, the association said.
According to market researcher Clarkson, around 12 high-end cruise ships worth $6.5 billion will be ordered every year until 2019.
Source: Korea Times