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    Korea
     Feb 15, 2006
S Korean shipbuilders eye China

SEOUL - South Korean shipbuilders are scrambling to move production of ship hulls to China to take advantage of its cheap labor and vast factory sites, industry sources said Tuesday.

Making hull blocks is mainly labor-intensive, so it is cost effective to manufacture hull blocks in China and assemble them back in South Korea, the sources said.

Leading the pack is Samsung Heavy Industries, the world's third-largest shipbuilder, which has been operating Samsung Heavy Industries Ningbo, with an annual capacity of 120,000 tons, since



1997.

Samsung Heavy Industries plans to expand the Ningbo factory in southeastern China to raise its capacity to 200,000 tons starting next year. In addition, the company is searching for a site to construct another factory for hull blocks in the northeastern Shandong province.

Daewoo Shipbuilding & Marine Engineering, the world's No 2 shipbuilder, is building a factory in the northeastern port city of Yantai to produce 200,000 tons of hull blocks annually beginning early next year.

"In the long run, our current shipyard on the south coast of South Korea will mainly assemble hull blocks that are produced in in China," company spokesman Lee Sang-woo said. STX Shipbuilding Co, ranking No 8 globally, plans to invest US$100 million to build a factory for hull blocks in Shandong province. The company failed to disclose a specific schedule for the factory construction.

Global industry leader Hyundai Heavy Industries has not unveiled any plans to shift its hull production to the world's most populous country. Shipbuilding is a key industry of South Korea, which has seven of the world's top 10 shipbuilders.

(Asia Pulse/Yonhap)

 

 
 



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