Japan riveted by speed of Korea's busy shipbuilders
Okpo, South Korea — In Okpo Bay 390 years ago, a Korean admiral defeated a Japanese fleet with the world's first iron-clad ships.
On the same site today, a fresh Japanese defeat is being planned: Okpo represents the phenomenal growth of the South Korean challenge to Japan's domination of world shipbuilding.
The Koreans are currently number two. But the gap is narrowing as the newcomers, with a hardworking labor force and a 20 percent price advantage, continue to snatch orders away from the established power. Of biggest concern to Japan, however, is that - while it and every other major shipbuilding nation cut back heavily on production capacity to cope with shrinking global demand - the Koreans are confidently and rapidly expanding their facilities.
Typical is Daewoo Shipbuilding and Heavy Industry's Okpo yard on the southern island of Koje, with a mammoth 1-million-ton dry dock on reclaimed land.
In 1978, the government gave a loan to Daewoo, the nation's leading business conglomerate, to take over a bankrupt yard. The investment is now starting to pay off. The first two ships to be built, chemical tankers for Norway, are to be delivered to the owner shortly.
Korea's overall shipbuilding capacity is to be increased from the present 4.7 million gross tons to around 6.5 million gross tons. This will bring it close to Japan, which in the late 1970s trimmed off well over half of its maximum capacity of 20 million gross tons a year.
Some industry analysts feel the Koreans are overdoing the optimism and are heading for a fall in the years ahead. At the same time, however, they confess that the Koreans so far have had no trouble filling their order books. Equally astonishing has been the rapid technological progress in the space of less than a decade - from simple coastal freighters to sophisticated specialist vessels.
At Okpo, for example, Daewoo has managed to win a Norwegian order for four complex chemical tankers that require considerable expertise in the manipulation and welding of stainless steel. The company didn't have that knowledge, so it sent 10 engineers to Norway to learn. Since their return they have passed on the know-how to another 300 men.
Until these orders were placed, the Japanese had believed they alone had the know-how to build such structures. It has been a rude awakening - especially as a Korean-built rig will be used to drill for oil off the Japanese coast shortly. The Japanese are becoming very reluctant to cooperate in boosting their main rival.
Technology remains a major factor in holding back the Korean advance. President of Daewoo Shipbuilding, In Kie Hong, describes Korea's present state as ''not first class. . . about middle level. We haven't touched very sophisticated technology yet, but I think we can catch up faster than other countries.'' As an example, he points out that while Daewoo may build the basic structure, major internal fittings like engines are supplied from abroad. Foreign owners, not yet convinced of the reliability of Korean engineering, insist on European or Japanese power units.
The order books are full now, but in recent months there has been nothing to carry the Okpo yard into 1984.
New orders have gone instead to its main rival, Hyundai, which pioneered the Korean shipbuilding boom from its east coast yard at Ulsan.
Hyundai's two major dry docks are also full, along with a heavy backlog of orders for ships and drilling rigs worth over $1 billion which will keep it busy for at least a couple of years. As a result, the company's profits grew almost 200 percent last year.