Korean shipbuilding companies actively consider overseas expansion
South Korean shipbuilding companies are actively considering the construction of overseas production bases to address a shortage of manpower. However, some are raising concerns about potential “technology leakage” arising from the construction of overseas shipyards, according to Business Korea.
According to industry sources on Nov. 28, HD Hyundai Heavy Industries is scheduled to begin trial operations of the IMI shipyard, established in collaboration with a local company in Saudi Arabia, starting this month. The IMI aims to be in full operation by the second half of next year. HD Hyundai Heavy Industries is also planning to establish an additional ship engine factory in the vicinity.
HD Hyundai Heavy Industries is also considering leasing the Subic Shipyard in the Philippines. The company has secured a contract to build a total of 10 vessels in the Philippines, including two escort ships, two patrol frigates, and six offshore patrol vessels. The maintenance and upkeep of these vessels will be carried out at the Subic Shipyard.
Hanwha Ocean passed the proposal to establish its U.S. subsidiary, Hanwha Ocean USA Holdings, in a board meeting in September. The U.S. subsidiary will play a role in exploring production bases with a focus on the North American region in the future. Recently, there have been rumors about the potential acquisition by Hanwha Ocean of Philly Shipyard in the United States.
The reason overseas expansion is actively being considered is due to the specific labor shortages prevalent in the shipbuilding industry. The domestic shipbuilding industry is making efforts to expand its workforce to handle a workload spanning the next three to four years, but it continues to grapple with chronic labor shortages and consistently appeals for solutions.
According to the Ministry of Trade, Industry, and Energy, domestic shipbuilding companies hired 14,359 employees by the third quarter of this year, surpassing the initially targeted figure of 14,000. It is noteworthy that 85.9 percent of the new hires are foreign workers and the industry is still facing challenges due to a shortage of skilled workers.
