According to reports, South Korean shipb
uilders are scrambling to move production of ship hulls to China to take advantage of its cheap labor and vast factory sites, industry sources said.
Making hull blocks is mainly labor-intensive, so it is cost effective to manufacture hull blocks in China and assemble them back in South Korea, the sources said.
Leading the pack is Samsung Heavy Industries Co., the world's third-largest shipbuilder, which has been operating Samsung Heavy Industries Ningbo Co., with an annual capacity of 120,000 tons, since 1997.
Samsung Heavy Industries plans to expand the Ningbo factory in southeastern China to raise its capacity to 200,000 tons starting next year. In addition, the company is searching for a site to construct another factory for hull blocks in the northeastern Shandong province.
Daewoo Shipbuilding & Marine Engineering Co., the world's No. 2 shipbuilder, is building a factory in the northeastern port city of Yantai to produce 200,000 tons of hull blocks annually beginning early next year.
STX Shipbuilding Co., ranking No. 8 globally, plans to invest $100 million to build a factory for hull blocks in Shandong province. The company failed to disclose a specific schedule for the factory construction.
Global industry leader Hyundai Heavy Industries Co. has not unveiled any plans to shift its hull production.