“Korean shipbuilders will continue to receive new orders, but selectively. Within the next ten years, Korean shipbuilders’ share of the world shipbuilding market is expected to reach 40 per cent.”
This is the way the new chairman of Korea Shipbuilders’ Association, KOSHIPA, Jing Wan Kim predicts the future for the Korean shipbuilders.
KOSHIPA is a non-profit organisation to promote the common interests of its member shipyards. Mr J. W. Kim continues: “The world’s largest shipbuilders’ order books are full for approximately three years. The figures as at the end of 2004 are up almost 30 per cent in terms of cgt compared with a year earlier and are expected to increase even more in the years to come, especially when it comes to technically advanced ships.
“In terms of value, the share of technically advanced ships such as LNG ships and large container ships built at Korean shipyards is expected to increase the most. These ship types are also expected to rise to 40 per cent in 2015 from about 20 per cent in 2004.”
A leading role. The Chairman of KOSHIPA, Mr J. W. Kim is president and CEO of Samsung Heavy Industries. He joined the Samsung group 32 years ago, and has been instrumental in developing this industrial giant. As chairman of KOSHIPA, he intends to promote international cooperation to ensure a sound development of the world shipbuilding industry. Mr J. W. Kim says: “From now on, I want to strive to improve Korea’s shipbuilding industries and motivate Korean shipbuilders to co-operate on common interests.”KOSHIPA works for the common benefit of all its member companies. Each member company, as per its management decision, is ready to invest in, or collaborate with, shipyards outside Korea, both in Asia and outside Asia.
“In the era of globalisation,” explains Mr J. W. Kim, “there are common issues, such as the environment and safety, that the world shipbuilding industry as a whole should address urgently and in a cooperative fashion for the benefit of the industry, clients, and all those that depend on efficient, safe, and environment-friendly shipping. Korean shipbuilders are prepared to assume a leading role and greater responsibility in the shipbuilding industry in order to ensure global cooperation.”
Higher value orders. Korean shipbuilders have greater mass production capacities than their competitors. This has provided, and can still provide, cost efficiencies relating to design, technical and production processes. Along with their large facilities for building very large crude carriers, they have the competitive advantages for building other large ship types such as LNG carriers and container carriers.
Predicting the development of new ship types, new designs, and where the Korean shipyards are expected to have their main focus in the future, the chairman of KOSHIPA says: “The Korean yards are targeting technically advanced ships such as large container ships and LNG carriers. In that regard, Korean shipbuilders would like to increasingly attain higher-value orders such as those for up to 12,000 TEU container ships and more than 200,000 m3 LNG carriers.”
Common structural rules. But even if the sky at present and for the near future looks blue, there are some clouds threatening the industry. Key issues for Korean shipbuilders are to tackle steel shortages and the rising cost of steel, and also the appreciation of the Korean won against the US dollar, which affects the price competitiveness of their products.
“We are all aware of the negative impact that the soaring steel-plate prices and fluctuating exchange rates have had on shipyard profitability. As a result, some Korean shipyards have achieved lower 2004 operating incomes or made an operating loss, even though their revenues have increased during the year.”
As co-chairman of the Korean-Norwegian Economy Co-operation Committee since 2001, Mr J. W. Kim has been closely associated with DNV for a long time. With regard to the issue of common structural rules for class societies, which DNV has been involved in developing, he does not want to predict whether the future will be rosy or grey. There are still some unanswered concerns raised by the Korean shipyards. Mr J. W. Kim says: “The Korean shipbuilders have reviewed the rules. We have found that the increase in hull structural weight for the investigated tankers due to the increased scantling is between eight and eleven per cent.”
He adds: “Korean shipbuilders cordially hope the International Association of Class Societies will consider crucial items for the mutual benefit of all its members,” listing aspects that from their point of view are important:
Involvement with the IMO Goal-Based Standard
Harmonisation of the tanker and bulk-carrier initiatives
Transparency of the rule requirements
Clear verification of scantling increase
Proper time for the industry to comment and review drafts.