China Information

Tuesday, January 23, 2007

Shipbuilding Enterprise of South Korea Planning Expansion in Chinese Market Proactively

As reported by YONHAP News on 17th, the shipbuilding enterprise of South Korea, from a long-term perspective, was currently planning to establish a production base in China in a proactive manner. STX Group announced on the same day that they had planned to establish a comprehensive plant covering land of 460, 000 ping (1 ping is approx 3.3 sq.m.) in Dalian by the end of the next year to increase the annual production capacity of the group from the current 250, 000 tons to 500, 000 tons in different phases. The group also planned to establish a shipbuilding plant with 160, 000 ping in the same area to build bulk ship and Panamax PC. Prior to this, Samsung Heavy Industries Co. established a comprehensive plant with 120, 000 tons of annual production capacity in Ninbo and had planned to establsih a ship material and sea equipment plant covering 600, 000 ping land and with 500, 000 tons of annual production capacity in Shangdong Rongcheng by the end of the next year. DSSC decided to establish a comprehensive plant with loading, cutting and assembly facilities and covering 300, 000 ping land in Yantai by the end of this year. The principal of Shipbuilding Industry Association of South Korea revealed that as the quantity of ships increased, the demand for shipbuilding material would increase accordingly. Since South Korea has reached its maximum production capacity, the entering into Chinese market, which requires lower land and labor cost, can effectively meet the domestic request for shipping parts and meanwhile, they can also sell their products to the fast growing Chinese shipbuilding enterprises.

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