Gov`t announces plan to promote development of ocean plants

The government has stepped up efforts to raise the competitiveness of the domestic shipbuilding industry, whose world lead is being threatened by China, by naming the development and production of ocean plants as one of its main tasks.

An ocean plant comprising ships and plants is a facility needed to extract and produce oil and natural gas from the ocean. Since it is more than 20 times as expensive as an ordinary commercial ship, competition to win a contract is fierce among shipbuilders. But since high-level production technologies are needed, less experienced players in emerging economies such as China find it tough to win contracts.

The Knowledge Economy Ministry in Seoul on Wednesday announced a plan to develop the ocean plant industry by focusing on strengthening domestic ocean plant technologies and expanding contracts in an emergency economy meeting chaired by President Lee Myung-bak.

Under the plan, the contract value will grow from 25.7 billion won (22.5 million U.S. dollars) last year to 800 billion won (70 million dollars) by 2020. The ratio of domestic production of equipment materials required for ocean plant production will be increased from 40 percent last year to 60 percent by 2020.

The ministry said, “China has been threatening to encroach on the ordinary shipbuilding market that has been led by Korea, and resource-rich countries are fostering their ocean plant industries based on their mining lots. So we needed to devise special measures.”

Experts say Korea has limitations in developing related technologies and equipment due to lack of mining areas to utilize in the basic design of ocean plants. Because of this, domestic shipbuilders cannot build deep seabed facilities though they are good at producing floating platforms, such as drill ships and systems for floating, production, storage and offloading.

Vice Knowledge Economy Minister Yoon Sang-gik said, “With Korean companies such as Korea National Oil Corp. buying maritime mining lots, the number of offshore mining areas owned by Korea is increasing,” adding, “Mining lot development is also being pursued in waters of the East Sea, so we will actively utilize this.”

The ministry will raise the industry’s competitiveness by strengthening the competitiveness of Korean equipment and materials, securing design technology through fostering of experts, and setting up ocean plant clusters.

“The lack of ocean plant experts will be resolved by converting shipbuilding designers into those designing ocean plants,” the ministry added. “We will encourage universities to pay attention to ocean plants instead of focusing only on marine engineering, and nurture talented persons with master’s degrees and doctorates through engineering graduate schools.”

The proportion of ocean plants in the contract value of the domestic shipbuilding industry is soaring. Sales at Korea’s top three shipbuilders -- Hyundai Heavy Industries & Construction, Daewoo Shipbuilding and Marine Engineering and Samsung Heavy Industries & Construction -- reached a combined 50.6 billion won (44.4 million dollars) last year. Of this amount, the contract value of ocean plants was 25.7 billion won, surpassing that of ordinary commercial ships (24.9 billion won or 21.8 million dollars).

imsun@donga.com