Korean media: Pushing forward the construction of a Korean-style shipyard in India... Creating a "second Ulsan"

HD Hyundai signs business agreement with the state government

The largest South Korean shipbuilder, HD Hyundai, will proceed with the construction of the first Korean-style shipyard in India. This project aims to transplant the K-shipbuilding ecosystem to Tamil Nadu, a holy land of Indian manufacturing where more than 100 major South Korean companies, including Samsung Electronics and Hyundai Motor, have established themselves, intending to create a "second Ulsan."

In order to achieve its goal of ranking fifth in the world's shipbuilding industry by 2047, the Indian government announced an investment of 130 trillion won (approximately 600 billion yuan) to revitalize manufacturing. This aligns with HD Hyundai's strategy to diversify its global production bases and move away from China's competition.

Expanding investment beyond cooperation with local shipyards

On the 8th, HD Hyundai announced the signing of an exclusive business cooperation agreement (MOU) for the construction of a new shipyard with the state of Tamil Nadu. Tamil Nadu is the "heart" of Indian manufacturing, with over 100 major South Korean companies, including Samsung Electronics and Hyundai Motor, already established there.

At the end of 2023, Indian Prime Minister Narendra Modi announced that he wants to elevate India's current ranking outside the top 20 in shipbuilding to the top ten by 2030 and to the top five by 2047. For this purpose, he announced an investment of 80 trillion rupees (approximately 130 trillion won) to develop five shipbuilding bases. Tamil Nadu is one of these five main bases.

India, which has funds and land but lacks technology, has selected HD Hyundai, which possesses world-class technology, as a partner to transform Tamil Nadu into a shipbuilding hub. The two sides plan to specifically implement matters such as site selection, subsidy support, and investment sharing ratios. Some views believe the investment scale could reach tens of billions of won, and analysts believe that with the full support of the Indian government, the project will be rapidly promoted.

HD Hyundai's goal is not only to improve existing local shipyards, but also to build new shipyards and transplant the K-shipbuilding industry ecosystem locally. Tikkalim area, a strong candidate location, is known as the "twin of Ulsan," with a favorable geographical location. This area has deep-water zones and port infrastructure necessary for building large ships, is close to the shipbuilding production center, and has less annual rainfall, which is beneficial for maximizing the operational efficiency of shipyards that mainly operate outdoors. HD Hyundai plans to install core equipment such as overhead cranes, supporting Korean partner companies to join together, and building a "shipbuilding belt" from material supply to shipbuilding.

Operating facilities in Saudi Arabia, the Philippines, and the United States becomes a challenge

The level of cooperation between South Korea and India in the shipbuilding industry is continuously increasing. HD Hyundai's shipbuilding department's intermediate holding company, HD Korea Shipbuilding & Marine Engineering, signed a long-term memorandum of understanding (MOU) in July last year with India's largest state-owned shipyard, Cochin Shipyard, covering technology transfer and joint bidding. At the beginning of this month, the company also signed a business agreement with the local state-owned enterprise BEML to expand cooperation in crane business. BEML has production equipment for construction machinery. HD Hyundai's goal is to have BEML produce overhead cranes, supplying them to multiple shipyards in India.

India has more than 200 ports, with huge shipping potential. Some views believe that with the entry of South Korean shipbuilding into India, large-scale orders are expected in the future. If the two countries strengthen their cooperation, it may also enter the naval ship business of the Indian Navy. An official from HD Hyundai said, "The Indian government has a strong willingness to support the shipbuilding industry, which is a market worth looking forward to. We will continue to expand our cooperation with India in the shipbuilding and marine fields, taking it as a new growth driver."

However, for HD Hyundai's shipbuilding, the challenge is how to achieve profitability and quality simultaneously in countries with different labor and regulatory environments. After the Philadelphia shipyard in September last year, HD Hyundai plans to start a joint shipyard in Saudi Arabia next year. In addition to the existing Vietnam shipyard, HD Hyundai and Peru's state-owned SIMA shipyard have also jointly launched the construction of frigates. According to the MASGA project signed with the United States, it is also advancing joint construction with local shipyards in the United States.

Source: Chosun Ilbo

Original article: toutiao.com/article/1851044884982795/

Disclaimer: The article represents the views of the author himself.