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Korea's major yards take measures to increase output

Seoul: In order to cope with record backlog during today's unprecedented shipbuilding boom, Korea's major yards are investing in ways to rapidly increase production.

Hyundai Heavy Industries in Ulsan, the world's largest shipbuilder, currently employs some 33,000 workers and is able to complete 82 ships using 1.53 million tons of steel a year. However, after a record first half during which it took in 100 more vessels - including a landmark $1.3bn order for eight 13,100teu containerships from Nordcapital of Germany - it now has to step up production to handle its massive backlog, which in mid-October stood at 328 vessels of 35.7m dwt. The yard is therefore doubling the capacity of its pioneering 'on-ground shipbuilding' method begun in 2004 from eight to 16 ships a year as well as constructing a new offshore drydock. In this way its output will rise by 2009 to 102 (larger) vessels employing a total 2.13 million tons of steel, a 40% increase.

Samsung Heavy Industries (SHI) currently produces around 40 vessels a year but plans to increase that number to 70 to cope with an orderbook of 200 vessels, including containerships as large as 15,000teu. Block building and partial assembly is therefore being outsourced to two facilities in China, at Rongsheng and Ningbo, with the resulting 'mega-blocks' then floated to SHI's main facility at Geoje island, off the southern coast of Korea, for final assembly.

Daewoo Shipbuilding & Marine Engineering (DSME), also on Geoje island, currently builds around 47 ships a year but as of mid-October had a backlog of 206 ships. It has therefore expanded its Korean block fabrication activities by buying the Shin-han facility near Ulsan, which used to build blocks for SHI. It is also constructing a new floating dock, which will give DSME two drydocks plus four floating docks and allow it to build around 80 vessels a year.

Serious expansion plans are also underway at Hyundai Samho Heavy Industries (HSHI) in Mopko, which is currently the world's fifth largest shipbuilder, just behind fellow Hyundai group member Hyundai Mipo, the product tanker specialist. It is also Korea's most modern yard having been fully refurbished since being taken over by Hyundai in 1999. HSHI currently averages about 30 vessels a year but plans to have increased that total to over 40 by 2009. As of early next year it will introduce its own on-ground construction facility - for building suezmax tankers - followed by a floating drydock, thereby leapfrogging it over Hyundai Mipo of Ulsan into fourth position worldwide.  [07/12/07]

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