Domestic shipyards that have accumulated years’ worth of backlog are considering outsourcing production overseas. The docks at domestic shipyards are full, so some of the newly ordered ships will be constructed abroad, according to Korean business media Chosun Biz.
With the forecast that the shipbuilding boom will continue for several more years, domestic shipyards are considering producing high-revenue vessels in Korea while outsourcing those with standardized construction techniques to foreign partners.
According to the shipbuilding industry on the 17th, Hanwha Ocean visited India at the request of the Indian government last month and spent about ten days visiting shipyards under the Swan Industrial Group, Cochin Shipyard, Hindustan Shipyard, and L&T Shipyard. Previously, the Indian government formed a delegation of key shipyard officials and visited Korea at the end of last year to request cooperation in shipbuilding and repair from Korean shipyards. At that time, the Indian delegation visited Hanwha Ocean, HD Hyundai Heavy Industries, and Samsung Heavy Industries.
Hanwha Ocean expects to maintain a three-year backlog in the merchant vessel institutional sector this year. Last year, Hanwha Ocean secured nearly 40 vessels in the merchant vessel sector alone, including 19 liquefied natural gas carriers, 6 container ships, 8 tankers, and 5 liquefied petroleum gas carriers. Many forecasts indicate that the order volume in the merchant vessel institutional sector is expected to increase compared to last year. This is because the Trump administration’s push for expanded LNG exports is likely to increase orders for LNG carriers, and the tightening of U.S. sanctions against China is expected to funnel container ship orders to Korea.
Currently, the slots at Hanwha Ocean’s Geoje Shipyard are fully occupied. Therefore, they are considering whether to turn over some of the orders to Indian shipyards for production. A variable is the technological proficiency of India’s shipbuilding industry. Currently, Indian shipyards primarily build small to medium-sized vessels and are unable to construct large vessels directly. The fact that the Indian delegation visited Korea to request cooperation in the shipbuilding industry suggests that they largely expect technology transfer from Korean shipyards.
Samsung Heavy Industries has sent some of its construction orders to China. At the end of October last year, it entrusted the construction of four Suezmax-class tankers, worth 459.3 billion won, ordered by an African shipowner to the Zhoushan Shipyard in China. Zhoushan Shipyard is utilizing local facilities and personnel to build the vessels.
Samsung Heavy Industries currently holds more than three years’ worth of backlog. It set an annual order target of $9.8 billion (approximately 14.14 trillion won) for this year, with a shipbuilding sector order target of $5.8 billion. It is reported that they plan to focus on high-revenue vessels while expanding subcontracting for tankers and container ships.
A source in the shipbuilding industry said, “Samsung Heavy Industries can utilize China since it is not engaged in marine defense, but Hanwha Ocean and HD Hyundai are considering building U.S. warships, leading them to explore options in India instead of China.”