Minimum Restructuring
POSCO Research Institute said on March 15 that South Korea’s shipbuilding industry should be allowed to maintain its competitiveness with the effect of restructuring minimized. “In the case of a rapid restructuring, it could lose its excellent workers and skilled engineers in the long term,” said Lee Eun-chang, head researcher at the institute.
Lee mentioned the restructuring of the shipbuilding industry of Japan as an example to refer to. “It reduced its facilities by 35% in 1980 and 23.6% in addition to that in 1988, which resulted in its output halved in comparison to that during its heyday,” Lee explained. He added, “In contrast, South Korea has expanded its shipbuilding facilities on a large scale since 1993 and this has played a critical role for its shipbuilding sector to get the inside track in the global market that recovered from the second half of the 1990s.”
In this context, Lee said that collaboration will be likely to be a better option than facility reduction. “The sector needs to be divided into a part where competition should be promoted and the other where cooperation can yield a better result and then companies in the industry should work together like a single company in the latter,” it added, mentioning as examples the formation of consortiums for certain projects and the establishment of joint engineering companies for the sharing of offshore plant workers.
According to Lee, China and Japan are rapidly catching up with South Korea in the global shipbuilding sector these days based on huge domestic demands and financial supports. Japanese shipbuilders recently formed a joint venture to build high value-added LNG carriers and Imabari Shipbuilding is currently building docks for large container carriers. Chinese companies are accumulating experience in the field of LNG carrier and large container carrier as well with the government backing.