The South Korean shipbuilding industry, once a lodestar of the country’s industrial development, continues to be battered by lower cost Chinese competition and an oversupply of vessels on the market. Only three of South Korea’s majors still stand on the world stage – Hyundai Heavy Industries, Samsung Heavy Industries, and Daewoo Shipbuilding and Marine Engineering.
Now, Hyundai Heavy Industries is on the verge of buying out Daewoo Shipbuilding, potentially creating a shipping behemoth that would have a combined order backlog of 21.2% of the global market. The lesson here is simple: if you want to compete with low-cost Chinese shipyards in the cut-throat world of shipbuilding, go big or go home.
Hellenic Shipping News, my go-to source on all matters shipping, notes that “the combination of the two shipbuilders would create an unrivaled player in the sector.”
- Korea’s Mega-Merger of Shipyards Set to Dominate Global Shipbuilding (By Costas Paris, The Wall Street Journal., February 6, 2019)
- Hyundai Heavy to Sign Formal Deal to Take Over Daewoo Shipbuilding (Korea Times, February 12, 2019)
- Samsung Heavy Refuses Korea Development Bank Invitation to Buy Daewoo Shipbuilding (Nikkei Asian Review, February 12, 2019)
- Daewoo Shipbuilding workers OK strike against Hyundai Heavy’s Takeover (Hellenic Shipping News, February 19, 2019)
- Hyundai Heavy-Daewoo Shipbuilding to Double Combined Orderbook for LNG Ships: Data (Hellenic Shipping News, February 19, 2019)