Korean shipbuilders' global ambitions depend on skilled labor, local support
The country's two largest players, HD Hyundai and Hanwha Ocean, are pressing ahead with new partnerships and investments.
HD Hyundai has teamed up with India's state-run Cochin Shipyard and US shipbuilders Huntington Ingalls and Edison Chouest Offshore. Meanwhile, Hanwha Ocean, backed by an 800 billion won ($582 million) rights offering from its parent Hanwha Aerospace, is pursuing additional overseas opportunities following its acquisition last year of Philly Shipyard in Pennsylvania.
Both companies aim to secure early access to surging demand for naval and commercial vessels, especially as countries seek to counter China's growing dominance in global shipbuilding.
Experts, however, warned that significant challenges remain in human resources. Despite the appetite for expansion, neither the US nor India currently has the workforce or infrastructure to build large commercial or naval vessels at the scale Korean firms are accustomed to.
'Even if they operate a yard overseas, the first challenge they will face is a lack of process know-how and skilled workers,' said Kim Myung-hyun, an ocean engineering professor at Pusan National University.
The US builds only about five commercial vessels a year, compared with a global capacity of roughly 1,300. India accounts for less than 1 percent of the world's shipbuilding output.
Such limited domestic industries mean both countries lack not only experienced shipbuilders but also local suppliers of essential components, which can constitute around 60 percent of a vessel's value.
'Ship manufacturing, where adapting to diverse orders is key, still relies heavily on skilled labor trained on-site,' said an industry veteran. 'Even with a shared language and culture, training new workers takes time, so imagine how much harder it was overseas.'
Without sufficient skilled labor and local supply chains, Korean shipbuilders risk relying on components and personnel from overseas, undermining the cost advantages of overseas production and potentially adding significant expenses.
In response, Korean firms are looking to governments in Washington and New Delhi for support to help bridge these gaps. US President Donald Trump announced in March potential tax exemptions and plans to establish a special White House office dedicated to shipbuilding. India, meanwhile, is investing $2.2 billion in its shipbuilding sector to bolster capacity and competitiveness.
Korean companies view these measures as essential for overcoming local constraints and aligning shipbuilding projects with national security and naval expansion goals in both countries.
Yet experts warn that government policies are still at an early stage and uncertainties remain.
'For instance, it remains unclear how much of the demand for US naval vessel construction and maintenance will go to Korean shipbuilders, even if they invest in the US, or what specific roles they might be assigned,' said Yang Jong-seo, a researcher at the Overseas Economy Institute of the Korea Export-Import Bank.
'A range of issues, including regulations, the potential role of Korean workers and the scope of local participation, must be clarified. This may require formal talks between governments to ensure Korean firms are not disadvantaged in negotiations.'
Despite these plans, the shadow of past failures still looms large. In the 2010s, Korean shipbuilders suffered heavy losses in overseas ventures. Daewoo Shipbuilding & Marine Engineering, now Hanwha Ocean, sold its Mangalia yard in Romania for 29 billion won — about half its initial investment.
Hanjin Heavy Industries & Construction and STX Offshore & Shipbuilding, once ranked among the world's top 10 shipbuilders, collapsed under losses at overseas yards in Subic, the Philippines, and Dalian, China.
The central lesson is that future success abroad will depend not only on political partnerships but also on building skilled local workforces and stable supply networks, according to experts.
'Relying solely on cheap labor, the yards struggled to compete with China's even lower-cost, government-backed offerings,' the industry veteran said.
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