South Korean shipbuilders moving into China

South Korean shipbuilders are scrambling to move production of ship hulls to China to take advantage of its cheap labour and large construction facilities.

Leading the pack is Samsung Heavy Industries which has been operating Samsung Heavy Industries Ningbo Co., with an annual capacity of 120,000 tonnes, since 1997. Samsung plans to expand the Ningbo factory in southeastern China to raise its capacity to 200,000 tonnes 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 is building a factory in the northeastern port city of Yantai to produce 200,000 tonnes of hull blocks annually beginning early next year. In the long run, DSME?s current shipyard in South Korea will mainly assemble hull blocks that are produced in China. STX Shipbuilding plans to invest $100 million to build a factory for hull blocks in Shandong province.

The one exception is Hyundai Heavy Industries which has, so far, not unveiled any plans to shift its hull production to China.