Shipbuilding Competitivenss Slipping Away from S. Korea
Korean shipbuilders have dominated the global market, raking in many billions of dollars to help fuel growth in the country, but now a severe slump in the industry is making them a major cause for woes of the economy., reports Arirang News. The shipbuilding industry has been a major locomotive of Korea's export-led economy, accounting for about a tenth of the nation's exports for many years. Korea's vessel exports which set a record-high in 2011, fell by a third in the first five months of this year from the same 2012 period after a 30 percent fall for all of last year. A more serious problem is that the industry's mid- and long-term competitiveness is waning.
Korean Shipbuilders Vexed by Cancelled Orders
Some owners are cancelling as they lack funds to complete the purchase of the ship. Many of the orders are being cancelled after the ships have been built, as the buyers find they can't pay for the product amid worsening economic conditions, reports the Arirang News. Samsung Heavy Industries, one of the four leading shipbuilders in Korea, has asked a client in Italy to change its mind about cancelling a contract for a medium-sized oil tanker, which was scheduled to be delivered by the end of the year. According to Arirang News, many of Korea's shipbuilders are struggling with the same problem and the losses are even greater under a new payment method adopted in 2008 during the global financial crisis.
Korea Regains No.1 Shipbuilding Ranking
According to an April 25 report from Arirang News, many of Korea’s shipbuilders failed to get new orders in 2009. As a result, Korea lost the top place in the global shipbuilding industry to China. However, Hyundai Heavy Industries has increased new orders by almost 200 percent to 1.5 million tons in the first quarter of this year compared to the same period in 2009 and Korea regained the top spot. (Source: Arirang News)
Daewoo Acquisition Deal Underway
Its biggest shareholder is the state-owned Korea Development Bank, which owns a 31.3 percent stake in the company. When Daewoo Shipbuilding put itself up for sale, a three-member consortium comprised of POSCO, Hanwha and Hyundai Heavy Industries swooped. (Source: Arirang News)
Orders at Korean Shipbuilders to Break $30b
Korea's three major shipbuilders are expected to draw in orders worth $30b this year, Arirang News reported. Industry reports put orders for Hyundai Heavy Industries at $13b, Samsung Heavy Industries at $10-11b, and Daewoo Shipbuilding and Marine Engineering at $10b. Samsung Heavy Industries won the most number of orders as of March with four liquid natural gas tankers, one floating production storage, one offloading vessel, and nine oil tankers. Daewoo Shipbuilding and Hyundai Heavy Industries is also reportedly looking ahead to a stellar year and expected to secure their targets set for 2007 when foreign firms begin placing orders for various projects later on in the year. Source: Arirang News
Korean Shipbuilders Aim for $36b in Orders
Korea's top-three shipbuilders are eyeing $36b in sales this year, down from a record $37b last year. Korean shipbuilders secured almost half of the $100b in global orders last year offering a competitive balance of price and quality. But this year the shipyards are facing higher steel plate prices, while a strengthening Korean won against the dollar is eroding profits made from U.S. dollars. Korea's Hyundai Heavy Industries is the world's largest shipbuilder followed by Daewoo Shipbuilding and Samsung Heavy. Source: Arirang News
Report: Need for More Smaller Korean Yards Seen
According to Ariang News, several major Korean shipyards dominate the world shipbuilding market, but it looks like the industry could use more smaller players. Only 14 Korean shipyards made it to the world's top 100 shipbuilders. The list was compiled by the London-based market researcher Clarkson based on orders. The figure compares with 28 Japanese and 27 Chinese shipyards that made the cut. Analysts say this is because Korean shipbuilders have focused mainly on building large-scale shipyards and need to develop more small- and medium-sized shipyards to establish a more balanced and stable industry. Source: Arirang News
Korean Shipyards Dominate
Korean shipyards dominate the global shipbuilding market in terms of backlog orders. According to the London-based market researcher Clarkson, Hyundai Heavy Industries received 12.3 Million CGT or compensated gross tons' worth of orders as of the end of August, followed by Samsung Heavy Industries, and Daewoo Shipbuilding and Marine Engineering. Together with Hyundai's subsidiary, MIPO Dockyard and Samho, Korean shipyards have taken the top five places as the world's leading vessel makers. China's Dalian Shipbuilding Heavy Industry came in sixth with 2.9 million CGTs of orders. Source: Arirang News
Korean Ship Exports to Exceed $22b
Reports said that exports of Korean ships are expected to exceed $22b this year on the back of more sales of high-value-added vessels including liquefied natural gas carriers. The Korean shipbuilders association says domestic shipyards are likely to export $10.7b worth of vessels in the second half in addition to the $11 billion in the first half of the year. The association believes the industry will see a trade surplus of $19 billion this year, accounting for 70 percent of the country's aggregate trade surplus. Source: Arirang News
