Daewoo opens ship block factory in China

South Korean shipbuilders are expanding their manufacturing facilities abroad on the back of the vibrant market, despite nationalistic criticism that such overseas investments may cause inadvertent technology transfer to strong competitors such as China.

Samsung Heavy Industries, Daewoo Shipbuilding & Marine Engineering and STX are either operating or building dockyards or ship block factories in China as they can?t meet soaring demands with their domestic facilities. Hanjin Heavy Industries & Construction is also building a $754 million shipyard in the Philippines.

Daewoo recently opened its ship block factory in China?s western port city of Yentai, where it plans to produce 220,000 tonnes of ship blocks every year. “Many people worry that China will surpass Korea in shipbuilding. But if we make inroads into China and take advantage of its competency, that will help Korea maintain its leadership for a longer period of time,” said Nam Sahng-tae, Daewoo president and CEO.

Only Hyundai Heavy Industries opted to remain inside Korea, saying an overseas expansion is not necessary now and would only benefit China.