Seoul seeks ways to pool resources of the nation’s top three shipbuilders

As it sees its global market share heavily eroded by China, the South Korean government is looking to pool resources among its leading shipbuilders to remain competitive.

The Korean government has met with the chief technology officers of the country’s top three shipbuilding companies, HD Hyundai Heavy Industries, Samsung Heavy Industries, and Hanwha Ocean, to identify projects where they can all work together such as in training or developing green technology as well as advancing autonomous shipping.

A government official commented, “Given that domestic shipbuilding corporations have fiercely competed against each other in the past, it has not been easy to foster collaboration. However, as China is now chasing after advanced ship technologies, we have come together with a shared intent to maintain our leadership position through collaboration.”

“Through government support and public investments to its national shipbuilding ecosystem, China emerged as a market leader, commanding currently nearly 65% of global shipbuilding orders, an impressive rise considering the less than 10% share in 2000,” noted a recent report from Greek broker Intermodal. 

Meanwhile, the combined orderbook share of Japan and South Korea has declined from 78% to 31% over the same period. 

“Over the past decade, Chinese shipbuilders gained market leadership while their Japanese and Korean peers suffered due to a higher cost base and labour shortages. Chinese yards benefitted from policy support, a weaker RMB, softer steel prices, and a weak labour market in China, which capped labour costs,” notes a new shipbuilding report from HSBC published today.