Korean Shipbuilding Shares Technology with India ... Decide to Jointly Undertake Ship Orders

HD Hyundai Signs MOU with Largest Shipyard

Announced that India, which will cultivate the shipbuilding and maritime industries including "ensuring 1,000 commercial ships within 10 years," will collaborate with "K Shipbuilding." The largest Korean shipbuilding company, HD Hyundai, has decided to partner with India's largest state-owned shipyard to cooperate in all areas of the shipbuilding industry.

On the 6th, HD Korea Shipbuilding & Offshore Engineering, the mid-level holding company of HD Hyundai's shipbuilding division, announced that it signed a comprehensive Memorandum of Understanding (MOU) for long-term cooperation in the shipbuilding field with Cochin Shipyard Limited (CSL), India's largest shipyard. CSL is the largest shipyard in Kerala, southern India, and the Indian government holds 67.91% of its shares. Although it has experience in designing, building, and repairing various types of vessels from commercial ships to aircraft carriers, compared to shipyards in South Korea, China, and Japan, they urgently need to improve their technical capabilities. In the future, HD Hyundai will promote cooperation with Cochin Shipyard in all areas such as design and procurement support, technical cooperation to improve production efficiency and quality, and personnel training.

The Rise of India's Shipbuilding Industry ... South Korea Selected as the Best Partner

The long-term goal of this agreement is to "jointly undertake ship orders in overseas markets." It plans to create synergies by combining the technical capabilities of South Korean shipbuilding with India's manufacturing infrastructure. Currently, India's share in the global shipbuilding market, which is dominated by South Korea, China, and Japan, is 0.05%, which is negligible, but India has great long-term growth potential. Because of India's low labor costs, its manufacturing base is continuously growing, and it has more than 200 ports, making the shipping market directly related to ship orders very large. For the South Korean shipbuilding industry, which needs to resist China's low-price competition, this move could be an opportunity to secure new manufacturing partners and enter a huge new market first.

Preparatory work between South Korea and India for cooperation in the shipbuilding industry was officially launched last year. An example is the visit of the "Indian Shipbuilding Delegation" led by Cochin Shipyard CEO Madhu Nair and SCI CEO Binesh Kumar Tiwari to HD Hyundai Heavy Industries in Ulsan in early December last year. They personally visited the operational system and environmental ship technology of the shipyard, which can build up to 50 large ships per year. Afterward, both sides continuously discussed cooperation plans and signed this agreement about half a year later.

K Shipbuilding Enters Overseas Markets 2.0, Unlike 20 Years Ago

In the prosperous period of the Korean shipbuilding industry at the beginning and middle of the 21st century, it built and expanded large shipyards in the Philippines, China, and Vietnam to save on labor costs. However, after a long period of stagnation, most of them were sold at a low price and withdrew.

Recently, the Korean shipbuilding industry has entered a different "overseas expansion 2.0" era compared to 20 years ago. Due to the increasing strategic importance of responding to the rapid rise of China's navy and maritime supply chain by major countries such as the United States and India, K Shipbuilding is gaining new momentum.

In the United States, which is competing with China in the ocean, its own shipbuilding infrastructure has collapsed, and it takes dozens of months to repair submarines, a core combat capability. This became the background for Hanwha Ocean's acquisition of the Philadelphia Shipyard in December last year, expanding its domestic business and pushing forward the acquisition of Australian defense company Austal, which owns American local shipyards. Legislation to transfer the construction of naval vessels to allied countries like South Korea is also being pushed in the US Congress.

India plans to first collaborate with South Korea on projects where Cochin Shipyard, the most advanced in its infrastructure, will transfer the accumulated technical capabilities to other local shipyards. To this end, the Indian government will expand policy support this year and provide a fund of approximately 4 trillion won (about RMB 21 billion).

Sources: Chosun Ilbo

Original: https://www.toutiao.com/article/1836954784595220/

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