The Korean shipbuilding industry is facing a crisis due to increased competition from China and Japan. It is important to overcome this crisis and find new growth engines through the offshore plant industry and new industry transformation.
In recent years, China has been showing steep economic growth. Industries that have been ranked first in Korea and other countries in the past are also showing rapid growth in line with that economic growth. In the shipbuilding industry, Korea’s shipbuilding industry has been ranked number one in the world, but the growth of China’s shipbuilding industry has put Korea’s shipbuilding industry in a crisis situation since a few years ago. China’s shipbuilding industry, in particular, has been rapidly expanding its share of the global market by improving its technological capabilities and greatly increasing production efficiency with strong state support. This means that they have grown to rival the Korean shipbuilding industry in quality and performance, not just price competitiveness.
Moreover, Japan’s shipbuilding industry, which sat on top before Korea’s shipbuilders took over, is undergoing restructuring and has recently benefited from the windfall of a weaker yen due to Japanese government policies, which has increased the amount of ships being ordered, posing another threat to Korea’s shipbuilders. Japan is making a comeback based on its long-acquired technology and price competitiveness due to the low yen, and this is putting a lot of pressure on Korea’s shipbuilding industry, with some Korean media outlets and industry insiders saying that Korea’s shipbuilding industry has already lost its top spot.
However, in order to overcome this situation, the shipbuilding industry is diversifying its production fields, and one of the fields that is gaining new attention is ‘offshore plants’. The term itself has actually been mentioned in newspapers and scientific magazines for quite some time, and you may have come across it a few times in the news, such as when Korea’s shipbuilding industry received an order for an offshore plant. However, many people don’t know exactly what an offshore plant is or think of it too narrowly. So, what does the term ‘offshore plant’ refer to? Let’s take a look at the different types of offshore plants and what knowledge is taught in the Department of Shipbuilding and Marine Engineering to prepare students for the field of offshore plants in the real world.
First of all, what does ‘offshore plant’ refer to? The word ‘plant’ refers to a factory complex equipped to produce or process products such as electricity, oil, gas, fresh water, or, more narrowly, crude oil. From this, it can be seen that the term ‘offshore plant’ refers to a ship or offshore structure carrying equipment to excavate, drill, or produce resources buried under the sea. The drillships in the movies Armageddon and 7th Cavity are examples of offshore plants. In general, the ‘offshore plant industry’ includes not only the manufacturing of offshore plants, but also the process of transporting and installing them to a designated location, depending on the type of offshore plant.
The reason why the offshore plant industry is attracting attention is that as the importance of various resources buried on the seabed has increased, it has become necessary to have comprehensive facilities that can mine, produce, and transport them even in locations far from the coast. The reason why the shipbuilding industry in particular is interested in offshore plants is that the manufacturing price of offshore plants is higher than that of ordinary ships because various advanced technologies and equipment are used in the process of manufacturing offshore plants. Therefore, receiving an order for an offshore plant with comprehensive facilities is as valuable in terms of profit as receiving an order for several ordinary ships.
The offshore plant industry is recognized as a sector with high growth potential globally. Countries around the world are paying great attention to the development of marine resources to strengthen their energy security, which is leading to an increase in demand for offshore plants. In order for the Korean shipbuilding industry to maintain and strengthen its competitiveness in this field, it is necessary to make technological innovations in the field of offshore plants and flexibly respond to various market demands.
Just as there are various types of ships, there are also various types of offshore plants. First, we can categorize them into ‘drilling’ and ‘production’ depending on their purpose: ‘Drilling’ is responsible for drilling the surrounding ground so that the equipment necessary for drilling can be installed before drilling for resources, and ‘drillship’ is an example of a ship carrying drilling equipment. ‘Production’ is an offshore plant equipped to produce resources, and ‘FPSO’ is an example. FPSO stands for ‘Floating, Production, Storage and Offloading vessel’ and is a type of offshore plant that floats in the ocean and is equipped to produce oil and gas, store it, and offload it to other transportation vessels.
Offshore plants are also categorized by their shape, which can be divided into ‘fixed’ and ‘floating’ offshore plants. ‘Fixed’ means that the lower part of the offshore plant is designed to be fixed to the seabed and is usually installed in shallow water. Floating, on the other hand, is designed to float in the ocean and not be affected by the depth of the water, rather than being anchored to the seabed if the ocean where the development is to take place is deep. While a fixed type is designed to allow the offshore plant to withstand the effects of wind, currents, and water depth while remaining in place, a floating type is designed to float around, like a buoy commonly found on the beach, while being freely affected by wind and currents and not being swept away from its location.
So, what knowledge does the Department of Shipbuilding and Offshore Engineering teach to prepare students for the increasingly popular field of offshore plants? First of all, we teach the fundamental part, general knowledge about plants. We teach not only the types of offshore plants and their roles, but also various thermodynamic knowledge necessary to understand the production process of offshore plants that produce oil and gas, such as FPSOs, as well as what equipment an offshore plant consists of and the role of each equipment, and the overall production process.
Also, as I mentioned earlier, offshore plants are located on the sea and are affected by currents and winds, so they must be able to withstand the forces generated and be durable enough. We also teach how much force an offshore plant must withstand and how strong it must be depending on the sea conditions. In addition, we teach practical knowledge such as the steps involved in the overall design process of an offshore plant, the economic figures that need to be calculated, and how to interpret these figures and make decisions based on the results. In addition, we are also expanding the scope of the course to include offshore plants, so that students can learn about the design and safety review process of ships and offshore plants.
The current crisis in the shipbuilding industry, which I mentioned earlier, is the first and biggest crisis faced by the shipbuilding industry, which has been thriving since the industrialization era in the 60s and 70s. While Korea’s neighbors, China and Japan, have been threatening production, it is also a crisis that has emerged as international trade volumes have decreased due to fluctuations in international oil prices, exchange rates, and interest rates, reducing the amount of new orders for ships from shipping companies in each country. That is why the shipbuilding industry is focusing on offshore plants as a way to tackle this crisis, as they can make great profits economically, and they believe that they can do so based on the technology they have accumulated over the years of producing ships. However, as the crisis is a crisis, offshore plants will not be the only way to tackle the crisis.
Therefore, the shipbuilding industry is looking for ways to overcome the crisis not only by strengthening technology, but also by diversifying markets and shifting to new industries such as renewable energy. As a result, the shipbuilding industry is expected to continue to grow in the future, centered on offshore plants, which in turn will have a positive impact on Korea’s economy. We look forward to seeing the shipbuilding industry’s vigorous innovation and growth strategies bear fruit.
