Most Korean shipbuilding firms consider new strategies to win more shipbuilding orders for cutting-edge vessels, such as liquefied natural gas (LNG) carriers and offshore plants. Despite having more than an 80 percent share of the global shipbuilding market, conventional ships, such as bulk, container and crude oil carriers, have become the least profitable shipbuilding projects for Korean firms, as the global market for such vessels is saturated with late-comers.
Korean shipbuilding firms began concentrating investments into the technical know-how for the construction of sophisticated vessels about three to four years ago, as shipbuilding cost for such value-added ships ran about two to three times higher than that of building conventional ones. On the strength of their technical know-how, Korean ship-makers won shipbuilding contracts for a total of 23 LNG carriers last year, a sharp rise from only eight in the preceding year. Analysts said that the ships accounted for about 70 percent of the global orders and that another 100 LNG vessels will have to be built by 2010.
Korean firms also find that various offshore plants, such as a floating production storage and offloading (FPSO) system, used for offshore oil exploration, are more lucrative. They say that the global demand for such plants has been rising constantly and the construction period of such equipment is usually longer.