Shipbuilding industry Essay Example | Topics and Well Written Essays - 2000 words

Shipbuilding industry - Essay Example South Korea’s shipbuilding industry is watching China’s growth with lot of concerns. It should be noted that China is using indigenous technology for shipbuilding whereas South Korea is importing such technologies from overseas countries. Moreover, cheap labor is another major asset of China in promoting shipbuilding industry. In any case, South East Asia (Japan, China and South Korea) dominates the present global shipbuilding industry. These three nations accounted for more than 78% of global ship production in 2005. â€Å"In the same year, Korean shipbuilders received 21,960,000 GT, 37% of world shipbuilding orders, while Japanese shipbuilders secured 14,230,000 GT, 24.5% of the world total, and Chinese firms received 9,640,000 GT, 16.6% of the world total†(Shin & Ciccantell, 2009, p.184). These statistics clearly suggest that South Korea is the current leader in global shipbuilding industry even though Japan and China are not far behind. Shipbuilding history i n Korea has started even in the 16 th century. After getting independence in 1948, Korean government established a national company; Korea Shipbuilding and Engineering Corporation (KESC), to promote shipbuilding. Since then Korea witnessed huge growth in shipbuilding industry. ... It should be noted that all the big three are well known companies in the world at present. In the Korean shipbuilding industry, the number of workers has been increasing, which reflects the high performance of the industry. The number of workers in the industry in 1995 was 77,330, and it increased to 97,323 by 2004. Korean shipbuilders enlarged the labor force of unskilled workers of subcontracting companies in order to reduce labor costs. Furthermore, Korean shipbuilders worry about the possibility of a shortage of young technicians, an aging labor force, and the general trend among young people to avoid working in the local areas where most dockyards are located (Shin & Ciccantell, 2009, p.182). Shipbuilding requires huge manpower. The role of machines in manufacturing ships is minimum compared to the role of manpower. As in the case of other industries, shipbuilding industry is also facing strong competition in international market. The emergence of China as the cheapest labor or iented country is causing problems to Korean Shipbuilding industry. The success of Korean shipbuilding industry can be attributed to three factors; First, major shipbuilders started to reduce production at a time when the demand for new ships increases. Second, South Korean government implemented meaningful strategies to exploit the opportunities. Third, South Korea managed to continuously develop and upgrade its production processes, sustaining its initial cost advantages through rationalization and innovation (Bruno & Tenold, N.d., p.21). In short, South Korea’s current leading position in shipbuilding was obtained due to the favorable trends in the market and the visionary policies implemented by the government. One of the major raw materials required for ship manufacturing is steel.