Lessons from Korea

BLUE’s Simon Phillips reports from a recent trip to the heart of Korea’s ship building industry 

Earlier this year, BLUE had the opportunity to visit Korea with Ardmore Shipping for the naming ceremony of two newbuild vessels at SPP Shipbuilding.  Of course, Korea’s reputation as one of the world’s leading ship building nations speaks for itself.  Korea was the world’s largest ship building exporter until 2012, when its total exports of $37.8 billion were surpassed by Chinese exports totaling $39.2 billion, but it remains home to seven of the world’s top ten shipbuilders. 

Upon arrival in Korea, it instantly became clear just how high a profile the shipping industry enjoys here. Whether it was articles in the Korean Air inflight magazine, programmes on Korean television or ship building adverts on posters and billboards, shipping is big business. This was confirmed on the journey from Seoul to Geoje Island, home to Daewoo Shipbuilding and Marine Engineering, Samsung Heavy Industries (SHI) and SPP Shipbuilding, where visitors are met by a giant DSME billboard welcoming them to the ‘Shipbuilding and Marine Resort City’ of Geoje. 

Geoje City is a ship building hub, as well as being something of a company town. The Samsung Hotel (complete with views of the cranes of the SHI shipyard) sits on a hillside overlooking the city, with Samsung apartment blocks and other employee facilities peppered throughout the city, as well as the local offices of some of BLUE’s other clients, including International Paint and Wärtsilä. 

Our visit took in a tour of the DSME shipyard in Okpo, where Maersk’s Triple-E vessels are under construction. The yard spans 4.3 million square metres and everything was of a mind-boggling scale, not least Dock 2, the world’s largest dock, which has a capacity of 1 million tonnes, specializes in ultra-large vessels and was shared at the time by four large tankers. However, most of our time was spent at the shipyards of SPP Shipbuilding in Sacheon, Tongyeong and Dukpo. It was hugely insightful to spend time at the sharp end of the ship building industry, as well as bringing into focus the sheer scale, complexity and the technical accomplishments of this sector. 

This might sound like a platitude, but the pride, enthusiasm and commitment that was visible from everyone at SPP Shipbuilding was genuinely impressive. We attended the naming ceremonies of Ardmore Shipping’s two new vessels, the Ardmore Seavaliant and the Ardmore Seaventure, both IMO 3 product and chemical tankers. Their pride in their work was borne out by the naming ceremonies for the vessels, which were impressive affairs in their own rights, complete with national anthems, fireworks and streamers. 

The Korean ship building sector is not immune from the immense challenges that the whole shipping industry is wrestling with, but there is something to learn from the strategies that some of the leading shipbuilders have adopted under such tough conditions, as well as the core values that continue to guide their business. 

SPP Shipbuilding has chosen to specialise in the construction of MR tankers and has established an enviable international reputation for the quality of the vessels that it builds within this class. At the same time, other shipyards are reaping the benefits of having diversified into new business areas, particularly the offshore sector. Shipbuilders have also sought to respond to market concerns about persistently high bunker prices and the importance of fuel efficiency - not to mention environmental concerns about shipping emissions - by incorporating a range of fuel-saving design features into the specifications that they now offer to their customers. Whatever your views on the merit of the ‘eco-ship’ concept, the upturn in orders for new product tankers would suggest they are on to something. 

Investing in what you do best; moving with the market to offer new solutions to new challenges; diversifying into new sectors – all ways in which shipbuilders have responded to challenging economic conditions. Underpinning this is an ethos of working in partnership with their customers, confidence in the quality of their services and taking a visible pride in the value of their work. There are lessons in there for all of us.