Shipbuilders’ success

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Korean shipbuilders retained the top spot in global order receipts for the fourth consecutive month in August. According to data from the Ministry of Trade, Industry and Energy, local shipyards won orders totaling 735,000 compensated gross tons (CGTs) last month, accounting for 73.5 percent of the total 1 million tons of orders placed worldwide last month.

By vessel type, domestic dockyards received all three orders for liquefied natural gas (LNG) carriers and 13 out of 14 tankers, including 10 LNG-fueled ships. In the first eight months, Korean shipbuilders logged orders amounting to 4.64 million CGTs, second to China’s 5.02 million. In value terms, however, the domestic shipyards’ accumulated orders worth $11.3 billion in the January to August period edged China’s $10.9 million.

The reversal was largely thanks to the Korean shipbuilders’ superior competitiveness over their Chinese rivals in high value-added vessels, such as LNG carriers and very large crude carriers (VLCCs). In fact, local shipyards won orders for 24 of the total 27 LNG carriers and 10 out of the 17 VLCCs placed globally in the first eight months. That means the Korean dockyards received almost all of the orders for these high value-added ships except for those given to the Chinese and Japanese shipyards by their governments to protect own industries.

Even more welcome than the news about Korean shipbuilders regaining the world’s top position was the improved employment situation. The industry, which had trimmed its workforce, turned around to hire 110,000 workers last month. Shipbuilders recruited not only manufacturing workers but also researchers in the first half and will continue to do so in the second half.

Experts also attribute the industry’s recovery to pre-emptive reform measures. The “supply-side renovation” has led to a sharpened competitive edge through mergers and acquisitions, pointing to the importance of drastic restructuring for the consequent growth. One could also reaffirm employment comes from growth, and the government’s financial support is no more than a supplemental measure. After all, the increase in jobs at shipyards resulted from reviving global demand and industrial growth. Local shipbuilders deserve praises in this regard, and showed the direction in which the government’s job creation policy should go.

Source: Korea Times

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