Continued growth for Korean shipbuilding exports

Korea’s shipbuilding exports will gain 6.1% every year on average for the next 10 years thanks to its technological edge and brisk market, said a London-based market research unit. Having posted an annual two-digit growth since 1996, the nation’s shipbuilding exports are projected to jump from $17.7 billion last year to more than $30 billion in 2015.

The shipbuilding sector will enjoy another decade on continued rise in demand after worn-out vessels were scrapped in the mid-1990s and declining ship prices. Increasing global maritime trade volume, triggered by China’s rapid economic growth, also led to more demand for large vessels, a segment where Korean shipbuilders are the strongest, as shippers sought economy of scale, according to Kim Young-hun, professor of marine engineering at Mokpo National University.

“Tightened rules for maritime pollution control also resulted in demand for new ships to replace old ones that do not meet the requirements,” Kim said. “Introduction of new technologies and larger demand for marine resource development such as oil drilling also boosted demand for ships.”

Kim noted that Korean shipbuilders need to work with the government to train more workers as the industry is expected to lack in manpower of 9,000 over the next three years. “They should invest more in fostering the shipbuilding workforce, operate the training centres more flexibly and increase direct employment instead of depending on smaller partner companies,” Kim said.

Korea is expected to see a shipbuilding trade surplus of $27 billion in 2015 as its imports – mostly second-hand vessels – would fall below $3 billion. The combined production volume at the nation’s shipyards is expected to reach 16.7 million gross tonnage in 2015, the report said. Korean shipyards won 35% of the new orders issued around the world last year. They also accounted for 35.7% of the global order backlog and 35.2% of ships built worldwide in 2005.