South Korea: Shipbuilding Companies Compete for Bulk Carrier Orders from India

South Korea’s shipbuilding industry experiencing extreme difficulties in receiving orders is to begin a fierce competition on winning bulk carrier orders. According to the industry on September 9, the domestic shipbuilding companies are told to be unrolling negotiations with India’s Reliance Group reported to have a plan of placing bulk carrier orders.
The Reliance Group with a plan of placing a bulk carrier order is India’s leading company led by Mukesh Ambani, one of the wealthiest businessmen in the world.
The scale of orders to be placed by the Indian gigantic company is known to be six to ten units of bulk carriers. Given that one unit of capsize bulk carrier (170,000-DWT level) is currently valued between $60 million and $70 million, the order is projected to cost $700 million at the maximum.
Since orders have been extremely scarce in the shipbuilding industry, most of the domestic shipping companies entered the bid. Most major shipbuilders, excluding Hyundai Heavy Industries, such as Daewoo Shipbuilding & Marine Engineering, Samsung Heavy Industries, STX Offshore & Shipbuilding and Hanjin Heavy Industries & Construction, and small and medium sized companies have submitted proposals. The sector prospects the winner will be selected within next month at the latest.
Samsung Heavy Industries is showing interest in the recent order although it totally lacks the remaining orders.
Such large size orders are more than welcomed by the shipbuilders who are desperately waiting for orders.
According to the Clarkson, an international shipbuilding market research institute, merely 32 shipbuilding orders have been newly placed worldwide during August. Despite a slight improvement from the first half, the shipbuilding industry seems to be facing tough times in receiving orders as the shipping industry still has not shaken off its risk factors such as a decline in shipping fares and shipping volumes.