Big 3 shipbuilders see recovery but midsize builders struggle

Although the global shipbuilding market is gradually showing signs of fiscal recovery this year, as with Korea’s big three shipbuilders, orders at midsized shipbuilding companies remain sparse.

According to the Korea Export-Import Bank of Korea on Friday, the order receipts of medium-sized shipyards in Korea were estimated to be around $110 million in the first quarter. Despite an improvement compared to last year’s first quarter, when there was not a single order, ship orders for the countries eight mid-sized shipbuilders are insufficient compared to the top three: Hyundai Heavy Industries, Daewoo Shipbuilding & Marine Engineering, and Samsung Heavy Industries.

In 2007, when the Korean shipbuilding industry was at its peak, local medium-sized shipbuilders won building projects worth $26.22 billion, accounting for roughly 26.7 percent of total shipbuilding orders in Korea.

However, orders dropped from $ 8.8 billion in 2008 to $ 1.4 billion in 2009. In 2013, it recovered slightly, reaching $4.22 billion, but then plummeted last year to $ 310 million.

Meanwhile, Korea’s big three received a total of 36 vessel orders worth $3.48 billion so far this year. The industry is expected to exceed last year’s figures -- 47 vessels valued at $4.5 billion -- by the third quarter.

By Julie Jackson (juliejackson@heraldcorp.com)