The domestic shipbuilding industry is establishing a response system for the U.S.-South Korea shipbuilding cooperation package known as "MASGA." Plans are being made to implement a shipbuilding-specific fund worth $150 billion.
According to industry sources on the 3rd, South Korea's "Big Three" shipbuilders, HD Korea Shipbuilding & Offshore Engineering, Hanwha Ocean, and Samsung Heavy Industries, along with the Korea Offshore & Shipbuilding Association, have formed a task force (TF) to respond to the U.S.-South Korea shipbuilding cooperation and have begun operations. The TF is reported to consist of one executive and one staff member from each shipbuilder.
The TF has already held its first meeting and is expected to enter into substantive discussions about the project after the summer vacation period in early to mid-month.
Earlier, on the 30th of last month (local time), the government announced that it would create a fund totaling $350 billion (about 487 trillion won) through trade negotiations with the United States, with approximately 43% of that amount, or $150 billion (about 209 trillion won), focused on the shipbuilding industry. This will be the largest fund for a single industry, aimed at supporting the expansion of U.S. investments by South Korean shipbuilders with public financing.
The specific operational details of the fund have not yet been disclosed. The government has explained that the fund will encompass various areas including new shipbuilding, workforce development, ship construction, and maintenance, repair, and overhaul (MRO). The industry is defining the fund as a government-to-government (G2G) collaboration.
Currently, the purpose of the TF is to grasp industry trends and share information. However, it is also expected to serve as a conduit for conveying the demands of the shipbuilding industry to the government in the future. As the fund will be invested in projects based on corporate demand, the three shipbuilders are anticipated to coordinate their strategies for entering the U.S. market and seek collaboration opportunities through the TF.
With the varying strategies of the three shipbuilders for entering the U.S. market, coordinating these strategies has also emerged as an important task. Hanwha Group is actively investing in the U.S., including with about $100 million to acquire a shipyard in Philadelphia. It is currently pursuing equipment expansion, job creation, and technology transfer. The plan is to expand its current annual shipbuilding capacity, which is at 1 to 1.5 vessels, to more than 10 vessels by 2035.
HD Hyundai is expanding its presence in the U.S. market through construction cooperation and technology sharing with local shipyards. It has decided to jointly build LNG dual-fuel container ships with Edison Chouest Offshore (ECO) and is continuing collaboration with defense shipbuilder Huntington Ingalls to improve expenses and delivery times.
Samsung Heavy Industries recently stated during an earnings call that it is "in discussions about cooperation plans with local shipyards in the United States" and is "exploring various forms of collaboration opportunities, including joint construction and business expansion."