Korean Shipbuilders Moving to Secure a New Production Base

South Korean shipbuilders are making big moves to grow their production in Southeast Asia. This decision comes because shipyards in South Korea are reaching their limits, and there is a huge global demand for new ships. By opening new factories in Southeast Asia, these companies hope to lower costs and stay competitive in the global market.

Expanding Shipbuilding in Vietnam

One of the most important expansions is by HD Hyundai Mipo, which is working to increase its shipbuilding capacity at its shipyard in Vietnam. Right now, the shipyard can build 15 ships every year, but the company wants to raise this number to 23 by 2030. This means a nearly 50% increase in its ability to build ships. The company has already asked the Vietnamese government for permission to make improvements to the production process and the facilities at the shipyard.

The shipyard is located in Khanh Hoa Province and covers 992,000 square meters. It has a 400,000-ton dock, a 100,000-ton dock, and a quay that is 1.4 kilometers long. HD Hyundai Mipo wants to focus on building medium-sized petrochemical product carriers, or PC ships. These types of ships are a big part of their business, making up over 60% of their commercial ship orders. By increasing their production capacity in Vietnam, HD Hyundai Mipo hopes to build 1.5 more ships every year, which will help meet the growing global demand for ships.

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Using the Subic Shipyard in the Philippines

Along with its work in Vietnam, HD Hyundai Heavy Industries is also using the Subic shipyard in the Philippines. This shipyard, 110 kilometers north of Manila, was first set up by Hanjin Heavy Industries in 2006 but closed down in 2019 due to a drop in global shipbuilding orders. Now, HD Hyundai Heavy Industries is planning to use the Subic shipyard to build parts for ships and offshore wind energy platforms.

The company also wants to expand its operations at the Subic site, focusing on maintaining, repairing, and operating ships and offshore platforms in foreign markets. Experts say that the return of South Korean shipbuilders to the Subic shipyard is a sign that the global shipbuilding industry is recovering. This move is important because South Korean shipyards are already working at full capacity, with some companies operating at 116% of their capacity. Using the Subic shipyard will help HD Hyundai Heavy Industries meet the rising demand for ships and offshore equipment.

Moves by Other South Korean Shipbuilders

Other South Korean shipbuilders are also expanding their operations in Southeast Asia. Hanwha Ocean, for example, is growing its offshore plant production by entering the Singapore market. The company has recently bought a 95.15% stake in Dynamac, a company that specializes in making parts for offshore platforms. This move will help solve the shortage of offshore facility sites in South Korea by creating new “multi-yards” in Southeast Asia. Hanwha Ocean plans to combine the hulls made at its Geoje plant in South Korea with the topside structures made by Dynamac in Singapore. This will allow Hanwha Ocean to take on more orders for floating production storage and offloading (FPSO) and floating liquefied natural gas (FLNG) platforms.

Samsung Heavy Industries is also thinking about building ships designed in South Korea at shipyards in Southeast Asia. This shows how South Korean shipbuilders are continuously investing in Southeast Asia to solve the problem of limited production capacity back home. By expanding in Southeast Asia, these companies can get additional sites and skilled workers at lower costs. This move also helps them stay competitive with Chinese shipbuilders and meet the delivery deadlines for their current orders.

Conclusion

In conclusion, South Korean shipbuilders are making a major shift by expanding into Southeast Asia. This move is helping them grow their production capabilities and stay competitive in the global market. By opening new production sites in Southeast Asia, these companies are in a better position to meet the rising demand for ships and offshore facilities. The expansion is a smart strategy that will help South Korean shipbuilders thrive as they deal with the limitations of their domestic shipyards.