Shipbuilding orders fall to 16-month low

Orders won by South Korean shipbuilders in August fell to a 16-month low last month, pushing Korea down to third place after China and Japan in the global ranking of shipbuilding nations, according to global data on Friday.

The worsening sales performance will put a heavier burden on the nation’s three major shipbuilders, which are pushing for a set of restructuring measures due to massive losses from lackluster offshore plant businesses -- which they have been capitalizing on as a new growth engine since 2011.

Korean shipbuilders received six orders last month that amounted to 149,000 compensated gross tons, according to data compiled by U.K.-based data provider Clarkson Research Services.

It is the lowest record since April last year when they posted 342,000 CGTs.

The order amount is also about one-third of Japan and China’s 426,025 CGTs and 406,941 CGTs, respectively, in the same period.

“Shipbuilders here are taking a passive stance toward securing new orders, burdened by the tremendous losses they recorded in the second quarter. The prevalent atmosphere is that we should focus more on enhancing profitability rather than winning more orders,” an industry source who wished to stay anonymous told The Korea Herald.

In the second quarter, among the Korean shipbuilders, Daewoo Shipbuilding & Marine Engineering posted the largest operating loss of a record-high 3.07 trillion won ($2.65 billion). Samsung Heavy Industries and Hyundai Heavy Industries followed with losses of 1.55 trillion won and 242.4 billion won each.

While the shipbuilders are pushing ahead with restructuring efforts to tide over the crisis, unionized workers of the top seven Korean shipbuilders vowed to go on a strike next Wednesday from 1 p.m.-5 p.m.

“We’re protesting against the companies pushing ahead with salary freeze and restructuring,” the union said in a news conference on Thursday, claiming that the management is shifting the blame for the losses to the workers.



By Suk Gee-hyun
(monicasuk@heraldcorp.com)