Posted on February 18, 2025
Domestic shipbuilders, who have accumulated several years’ worth of order backlog, are considering overseas subcontracting. Domestic shipyards’ docks are full, prompting some of the new vessels ordered to be constructed abroad.
With projections indicating that the shipbuilding boom will continue for several more years, domestic shipbuilders are considering producing revenue-generating vessels in Korea while passing on those with standardized construction technologies 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 toured under Swan Engineering, Cochin Shipyard, Hindustan Shipyard, and L&T Shipyard for about ten days. Previously, the Indian government formed a delegation of key shipyard officials who visited Korea at the end of last year to request collaboration in shipbuilding and repair from Korean shipbuilders. The Indian delegation toured Hanwha Ocean, HD Hyundai Heavy Industries, and Samsung Heavy Industries.
Hanwha Ocean expects to maintain three years’ worth of order backlog in the merchant vessel sector this year. Last year, Hanwha Ocean received orders for nearly 40 vessels in the merchant sector, including 19 liquefied natural gas (LNG) carriers, six container ships, eight tankers, and five liquefied petroleum gas (LPG) carriers. There are many projections that the order value in the merchant sector will increase compared to last year. The Trump administration’s push for increased LNG exports is expected to lead to increased orders for LNG carriers, while U.S. sanctions against China are likely to direct container ship orders to Korea.
Currently, the slot at Hanwha Ocean’s Geoje shipyard is fully occupied. Therefore, they are reviewing whether they can transfer some orders to Indian shipyards for production. A variable is India’s shipbuilding technology. Currently, Indian shipyards primarily construct medium to small-sized vessels and are unable to build large vessels directly. The Indian delegation’s direct request for collaboration in shipbuilding also largely anticipates the transfer of technology from Korean shipyards.
Samsung Heavy Industries has already sent some construction orders to China. At the end of October last year, an African ship owner commissioned four Suezmax (the largest vessel size that can pass through the Suez Canal) tankers, worth 459.3 billion won, and entrusted their construction to the Zhoushan shipyard in China. The Zhoushan shipyard is utilizing local facilities and manpower to build the vessels.
Samsung Heavy Industries also currently has an order backlog of more than three years. This year, the annual order target is set at $9.8 billion (about 14.14 trillion won), with the shipbuilding sector target set at $5.8 billion. They plan to focus on vessels with high revenue while expanding subcontracting for tankers and container ships.
A source in the shipbuilding industry said, “Samsung Heavy Industries can utilize China as it does not engage in naval defense, but Hanwha Ocean and HD Hyundai are considering building U.S. warships, showing a trend toward utilizing India instead of China.”
