SEOUL, KOREA - With a constant stream of the news of the capsized ferry boat on TV and newspapers for a week and the 20-year-old boat was purchased by the operating company from Japan, many people have wondered why a country taking pride in the fact that it's the world's No. 1 country in shipbuilding had to import a used passenger ferry boat from overseas.

 

According to shipbuilding industry sources on April 22, there is no shipbuilder in Korea to build passenger ferries like the Sewol. A shipbuilding industry official said, "Most small-sized shipbuilders went out of business during the 2008 global financial crisis while mid- and larger ones try to avoid build such ships because there is no money in it."

 

It is not that Korean shipbuilding companies have not made passenger vessels at all. For example, Samsung Heavy Industries built ten Ro-Pax ferries that doubled as passenger and freighter vessels. But it stopped building such ships after delivering two US$130-million boats commissioned by Sweden's Stena Line in 2007.

 

Daewoo Shipbuilding & Marine Engineering won in 2010 a $300-million order to build a large passenger ferry for Tunisia's state-run Compagnie Tunisienne de Navigation (CoTuNav) and delivered it in 2012. For most mid- to large-scale shipbuilders, smallish boats like the Sewol are not economical enough to build as it would cost more for them to build specially fitted smaller docks. 

 

But the shipbuilders are still interested in taking orders for large cruise ships. That's because cruise boats are profitable enough for them. For this reason, STX Group acquired Aker Yards ASA, the Norwegian ship yard, in 2007 and renamed it as STX Europe AS. The cruise ships STX Europe built, including the "Oasis of the Seas" and the "Allure of the Seas," were two of the most expensive cruisers in history at the price tag of about $1.5-2.0 billion. At the time, however, STX Group was merely the largest shareholder and has not closely involved in the building process.

 

A shipbuilding industry official said, "The core competency of building cruise ships is luxury design and interior furnishing materials, but that's exactly where Korean shipbuilders are weak at. It will take some time for them to be leaders in the cruise segment after a lot of trials and errors."