Thursday, March 8, 2012

China & Korea: Comparative analysis



Chinese yards have played a good game in commercial ship market with low labor cost, abundant resources, while South Korean rivals are recently making profits from high-value ship and offshore market with high-end technology.

As Chinese government actively supports its shipbuilding industry, competitions between the two leading shipbuilding countries are getting tougher.

Comparing technical skills between Korean and Chinese shipbuilders, putting Korea's technical standards at 100, China's designing skill, construction skill and management skill stand at 75, 75 and 62.5, respectively, which shows quite big gaps between them.

In case of production efficiency, Korea's output per man is about 4m-5m dwt, while China's about 1.5m dwt. Korea's production value per man is CNY 2m-4m and China's CNY 0.5m-1m and Korea's working hours per cgt is 10-15 hours and China "targets" 15 hours by 2015.

As for industry consolidation, as of the end of 2010, 19 Korean yards have exceeded cumulative delivery of 1m dwt each, up by eight yards year-on-year. Korean shipbuilders in Top 20 take about 67.6% with overall delivery of 44.34m dwt and 66.1% with overall order intake of 49.75m dwt. Chinese turn out to fall behind from those numbers.

It seems that South Korea's large-sized shipbuilding industrial clusters in Busan and South Kyongsang Province take great part in development of Korean shipbuilding industry.

Lastly, Korea's localization of marine equipment is almost 90% while China only remains at 54% and 30%, in case of high-value equipment.


Published : March 8, 2012

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