Jang Seob Yoon
Research expert covering South Korea
Shipbuilding industry in South Korea - statistics and facts
Despite navigating through difficult situations, South Korean companies remain at the forefront of the global shipbuilding market. East Asian countries dominate the industry, with South Korea and China vying for new shipbuilding orders across the globe. Historically, the leading country for shipbuilding was Japan in the 1950s. South Korea kicked off its entry into the industry during the 1970s, and developed its shipbuilding competencies to the extent that it's now a strong competitor to its neighboring countries. In recent years, China was leading the global market with the backing of the Chinese government. Nevertheless, South Korea still boasts a significant presence in the world of ship manufacturing, and its major players are not merely big fish in a small pond.
The main reason for volatility in the shipbuilding market can be attributed to fluctuations in oil prices per barrel. Oil prices also significantly decreased during those challenging periods, which impacted the demand for ships that transport it. Entering the 2020s, the emergence of Chinese shipbuilders offering lower prices coupled with the COVID-19 pandemic has presented further trials for domestic shipbuilders in recent years.
Thanks to a hefty order backlog, there is enough shipbuilding work guaranteed for the next few years. However, the steady reduction in the workforce over the years has led domestic shipbuilders to look for support from foreign workers, most of whom hail from Southeast Asian countries. This recent influx of migrant shipbuilding workers has also shown a trend in workers entering the country via visas with more lenient regulations.
How has the shipbuilding industry developed in South Korea?
The South Korean shipbuilding industry has experienced two major challenges in the 21st century, during which the volume of new shipbuilding orders plummeted. One was the Great Recession in the late 2000s, and the other was in the period between 2015 and 2016. Especially in the latter case, various shipbuilding companies suffered financial difficulties that necessitated drastic restructuring or even eventual bankruptcy.The main reason for volatility in the shipbuilding market can be attributed to fluctuations in oil prices per barrel. Oil prices also significantly decreased during those challenging periods, which impacted the demand for ships that transport it. Entering the 2020s, the emergence of Chinese shipbuilders offering lower prices coupled with the COVID-19 pandemic has presented further trials for domestic shipbuilders in recent years.
What is it like working in the shipbuilding industry?
Another defining trait of the shipbuilding industry is the sheer scale of the manufacturing process. Contemporary shipbuilding methods comprise of building up the ship in smaller blocks, which are then combined at the shipyard. Even though companies strive to take precautions, unfortunate accidents still occur every now and then regardless of experience and expertise.Thanks to a hefty order backlog, there is enough shipbuilding work guaranteed for the next few years. However, the steady reduction in the workforce over the years has led domestic shipbuilders to look for support from foreign workers, most of whom hail from Southeast Asian countries. This recent influx of migrant shipbuilding workers has also shown a trend in workers entering the country via visas with more lenient regulations.
What does the future hold for South Korea's shipbuilding industry?
The shipbuilding industry is a major economic sector for South Korea, and its domestic leaders are also prominent in the global shipbuilding scene. The South Korean government is working closely with companies to create synergies in research and development (R&D) and improve working conditions for employees. Amidst forecasted demand for ships running on alternative fuels, South Korean producers are setting their sights on the horizon.
