Shipyards in Korea and India are rethinking and restructuring in a bid to hold out during the credit crunch.
‘In South Korea, the scale of restructuring is evident, though analysts say that the “first round” of restructuring had not been dramatic. They say that a large scale second phase would begin in February. The world’s largest shipbuilding market is set to concentrate on business diversification, and may choose to build high value-added ships and offshore plants since smaller firms have so far not expressed any enthusiasm for this sector. And while large shipbuilders may be unable to get the finances to upsize themselves at the moment, they see this time as a chance to widen South Korea’s lead over Chinese shipbuilding. Meanwhile, failed South Korean builder C& Heavy Industries, which was liquidated has now been presented with three options. The first could be to reject financial support offered and rebuild the business independently by securing some US$10 million in funds and US$104 million in investment capital. The second option would be for the builder to allow the courts to restructure the business. The final option would be for the company to sell off to a third party. The South Korean government is keen to withdraw C& Heavy from the market and is heavily promoting restructuring to other yards.