HD Hyundai Heavy Industries’ Gunsan Shipyard was officially restarted on October 28, 2022 and started hull segment construction mode, and has entered into stable production stage.
HD Hyundai Heavy Industries recently announced that the restarted Gunsan Shipyard would be in full operation and start full-scale construction of hull segments in January 2023. However, due to difficulties in securing production manpower and skilled workers during the initial period of operation, the annual production capacity reached only 65,000 tons, which was lower than the initially set annual capacity of 80,000 tons.
From this year, Gunsan Shipyard has entered a stable production phase, with the number of employees increasing from about 1,200 in 2023 to over 1,400 as of this year, and is expected to increase to about 1,500 in 2025. The productivity of the Gunsan shipyard has increased by about 20% compared to the restart.
As of the end of May 2024, HD Hyundai Heavy Industries has secured orders for 20 gas carriers, including 3 liquefied natural gas (LNG) carriers, 5 liquefied petroleum gas (LPG) carriers, and 12 ultra-large liquid ammonia carriers (VLAC). With the increase in orders for gas carriers, Gunsan Shipyard will also see diversification in hull segment construction.
Starting from the second half of this year, Gunsan Shipyard will increase the number of Modular Unit (M/Unit) and P.E (Pre-Erection) fabrication processes, and will start producing hull segments of LNG/LPG carriers, including the main deck and cabins of LNG carriers as well as LNG tanks from 2025.
With the diversification of hull segment construction at Gunsan Shipyard, it is also expected to expand employment opportunities in the region and strengthen HD Hyundai Heavy Industries’ competitive position in the field of eco-friendly, high-value-added ships. The reason for this is that LNG/LPG carriers require more advanced manufacturing technology than container ships and very large crude carriers (VLCCs), which means more shipyard employees are needed.
HD Hyundai Heavy Industries Gunsan Shipyard personnel said, “To restart shipbuilding operations at Gunsan Shipyard, it is important to prioritize infrastructure development such as worker skills. As it has done for the past two years, Gunsan Shipyard will continue its efforts to shorten shipbuilding schedules and eliminate worker safety risks by increasing productivity, while striving to capitalize on synergies through cooperation with local governments.”
It is reported that Gunsan Shipyard is the youngest shipyard under HD Hyundai Heavy Industries, which was established in the most prosperous period of the ship market before the global financial crisis, and started the construction in early 2008 and put into production at the end of 2009. The shipyard covers an area of 1.8 million square meters and has a 1 million-ton class dock, which is about 700 meters long and equipped with a 115-meter high gantry crane with a maximum lifting capacity of 1,650 tons.
In its heyday, Gunsan Shipyard used to employ more than 6,000 people and could build about 20 ships a year.In 2010, Gunsan Shipyard completed and delivered 8 ships; in 2011, 14 ships; in 2012, 11 ships; in 2013, 10 ships; in 2014, 13 ships; in 2015, 16 ships; and in 2016, 13 ships. The steel production was 390,000 tons in 2012; 280,000 tons in 2013; 420,000 tons in 2014; 370,000 tons in 2015; and 380,000 tons in 2016.
On May 4, 2017, HD Hyundai Heavy Industries (then Hyundai Heavy Industries) announced that its Gunsan Shipyard would enter a shutdown status with immediate effect due to the depleted orders from the Korean shipbuilding industry at that time, which meant that this shipyard officially went into a state of closure. With the gradual recovery of the shipbuilding industry, Hyundai Heavy Industries announced the reopening of the Gunsan Shipyard on October 28, 2022, after five years. Since the restart, Gunsan Shipyard has been acting as a subcontractor, mainly responsible for building hull segments for HD Hyundai Heavy Industries Ulsan Shipyard, and delivering the first ship module for large container ships in early 2023.
The restart of Gunsan Shipyard has not been smooth as it is mainly responsible for the construction of hull segments. Gunsan Shipyard has been in the center of attention in the Korean industry as it has not been able to get out of the status quo of being a subcontractor of HD Hyundai Heavy Industries Ulsan Shipyard.
Late last year, some councilors in Gunsan criticized the Gunsan Shipyard as not being a shipyard, but rather a fabricator of segments that are cut, welded, assembled and transported to Ulsan. The shortage of labor in the shipbuilding industry is a key reason why the shipyard has been unable to expand its production, and the councilors urged the shipbuilder to “think about the reasons for its inability to attract manpower and take the initiative to address fundamental issues such as subcontracting for low wages and improving the working environment.”
In addition, other councilors pointed out that the restart of the Gunsan Shipyard would bring minimal impact on the revitalization of the local economy, “We should urge the Gunsan Shipyard to get out of the restart situation, which is based on the manufacturing of ship segments, and to start operations at the earliest possible time through new shipbuilding.”
In response to the industry’s voice, the shipyard made it clear that Gunsan Shipyard does not yet have the capacity to build a whole new ship, and that it will only be able to take orders for new ships on its own if it meets all the necessary production conditions and ensures a competitive advantage over other shipyards. Normally, at least 3,000 workers are needed to build a new ship, but the current number of employees at Gunsan Shipyard is clearly not up to this standard.