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MEK Marine Economy Korea Dec. 201412 KPI(Korea Policy Insight) Special Edition Vol.3-18 Offshore & Shipbuilding Marine Equipment Ports & Logistics Shipping Related Industries Policy & Rule Tech & Certs Finance Region & Cluster Global People Exhibition

Korean-ASEAN Shipbuilding & Offshore Tie-ups

Dynamic Partnership

) 8 2

. 3

. Toward Connective 2 1 0 2 (

0

8 Blue Ocean 6 3 0 바 울 서 호

번 Based on superior technology and reliability, Korean 록 등

shipyards seem to believe that the era of one-nation 2 - 8

9 dominance in the single global shipbuilding market is 동

재 over, as they focus on collective regional cooperation, 양 구

초 especially with ASEAN countries. 서 울 서

1 9 8 - 7 3 1 : 호 번 편 우

Korea: Angel for Indonesia's Blue Economy 11 Newsformation (518) Policy & Rule 35 Hanjin, Milestone Success at Subic 13 Offshore & Shipbuilding 27 Tech & Certs 39 LNG Carriers.. Engine of Market Recovery in 2015 16 Shipping Newsformation 29 Finance 41 Hanla IMS: Ensuring Safety & Optimized Ship Operation 19 Ports & Logistics 30 Region & Cluster 42 SUTL Global to Build Marina Facilities at Busan 20 Related Industries 33 Global 43 한아세안조선-수정 2014.12.5 7:0 PM 페이지2 white7 2438-cmyk-670 2438DPI 175LPI T 한아세안조선-수정 2014.12.5 7:0 PM 페이지3 white7 2438-cmyk-670 2438DPI 175LPI T 한아세안조선-수정 2014.12.5 7:1 PM 페이지4 white7 2438-cmyk-670 2438DPI 175LPI T

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Beyond Challenge,

Creating Masterpieces

Tailored to Our Valued Clients’ Needs

“Leading Company with a Challenging Spirit” is our motto, making a difference to be the world leader. At the heart of all our activities is maximizing our clients' satisfaction with best quality products & services without compromise.

Yes! Clients provide the energy that drives our DNA -- Challenge, Creativity and Connectivity in today's emerging hyper- connected world, creating new dreams and future value.

Integrated System Energizing Value Chain ...

Expanding Hanla IMS Business Territory

Shipbuilding & Marine Plant PLANT LED

●Merchant ship & Special ship ●Merchant ship & Special ship ●Industrial ●Marine Plant ●Marine Plant ●Home ●Defense ●Defense ●Marine

Head Office & Factory Machinery Factory Address: 115, Hwajeonsandan 1-ro, Gangseo-gu, Busan, Korea Address: 33, Hwajeonsandan 2-ro 134beon-gil, Gangseo-gu, Busan, Korea Tel: +82 51 601 7000 / Fax: +82 51 831 1850 Tel: +82 51 601 7000 / Fax: +82 51 831 1850 e-Mail: [email protected] e-Mail: [email protected] 한아세안조선-수정 2014.12.5 7:1 PM 페이지6 white7 2438-cmyk-670 2438DPI 175LPI T

Ocean Economy Network: KOMEA

Sea Intelligence, Insight & Inspiration

This year it has been an uphill battle for marine equipment businesses, encompassing the offshore and shipbuilding sectors. Designed to examine the current status of the ocean industry and draw inspiring lessons for better business performance in 2015, KOMEA Forum 2014 will take place December 11 at Paragon Hotel, Busan. Greenship Business Plaza

Themes/Presenters:

'Eco Wave Will Rise Higher in 2015' / Analyst Park Moo-Hyun of Hana Daetoo Securities

‘Recent Trends of China’s Shipbuilding Industry and Implications for Marine Equipment Sector’ / Senior Researcher Hong Sung-In of Korea Institute for Industrial Economics & Trade (KIET)

Date & Time: Dec. 11 (Thu.) 2014, 11:00~13:00 (Incl. Event Program Luncheon) Schedule Time Remarks Registration 10:30~11:00 All Participants Venue: Grand Prix Hall, 3rd Floor, Paragon Hotel, Busan Greeting 11:00 KOMEA Chairman Park Yoon-So Congratulatory 11:03~11:15 - Rep. Kim Do-Eup, National Assembly Hosted by: Addresses - Moon Sung-Wook, Director General for - Korea Marine Equipment Association (KOMEA) System Industry, MOTIE - Kim Ki-Young, Director General for Industrial - Dongnam Institute for Regional Program Evaluation Policy Bureau, Busan Metropolitan City (IRPE) Presentation of 11:15~11:40 ‘Eco Wave Will Rise Higher in 2015' (Analyst 1st Theme Park Moo-Hyun of Hana Daetoo Securities) Supported by: Presentation of 11:40~12:00 'Recent Trends & Implications of China's - National Assembly Rep. Kim Do-Eup Office 2nd Theme Shipbuilding Industry in Marine Equipment - Ministry of Trade, Industry & Energy (MOTIE) Sector' (Senior Researcher Hong Sung-In, - Korea Offshore & Shipbuilding Association (KOSHIPA) Korea Institute for Industrial Economics & Trade) - Korean Register of Shipping (KR) Q&A Session 12:00~12:10 - Korea Marine Equipment Research Institute (KOMERI) Luncheon & 12:10~ - Korea Industrial Complex Corp. (KICOX) Busan Branch Free Discussion

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Viewpoint

Korea, ASEAN in the Same Boat

Under the slogan “Building Trust, Bringing Happiness,” the 2014 ASEAN-ROK Commemorative Summit is to be held December Chairman 11-12 to celebrate the 25th anniversary of the Kang Jae-Jong bilateral relationship and explore a new level of Publisher cooperation for common prosperity. Bae Chul-Soo Co-Editor From the perspective of the marine equipment D.S. Lee industry, I would like to emphasize the importance H.C. Lee Deputy Editor of marine cooperation between Korea and ASEAN, Kim Ji-Soo especially as the Summit will be held in Busan, the emerging marine capital of Senior Researcher the world. Kim Ji-Won Copy Editor Asia’s dominance in the shipbuilding and offshore sector has been achieved James J. Morris through historic technological and production innovation advances since the Design / Graphics Jung Jin-Whan 1960s. That dominance, led by Japan, Korea and China, is expected to be Circulation reinforced further through cooperation with ASEAN members. Bae Na-Mi Rho C. S. In particular, through the so-called global value chain (GVC), I believe that Management ASEAN-Korea cooperation and collaboration will ensure greater common Kim Chin-Hee prosperity and sustainable growth considering the tremendous complementarities of Korea and ASEAN members in the shipbuilding and offshore arena.

In Korea, shared growth between large shipyards and SME marine equipment producers has been a critical factor in creating the country’s blue-ocean

Korea Marine Equipment Association competitiveness. (KOMEA) Address: 8F, 33, Gukhoe-daero 76-gil, Yeongdeungpo-gu, Seoul, 150-869, In my opinion, the time is now ripe to expand the concept of shared growth Korea beyond Korea. The forthcoming summit represents an outstanding opportunity Tel: 82-2-783-6952/4 Fax: 82-2-785-7647 to accelerate “Happy Together” cooperation between Korea and ASEAN in the e-Mail: [email protected] shipbuilding and offshore field.

BCS.Com Address: 7F, 7, Eulji-ro 14-gil, Jung-gu, Seoul, 100-846, Korea Park Yoon-So Tel: 82-2-6258-7870~3 Chairman

Fax: 82-2-6258-7877 Korea Marine Equipment Association (KOMEA) e-Mail: [email protected]

Marine Economy Korea 7

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CONTENTS December 2014 / Vol. 3-18

10 Issue & Focus ● Clusterizing Korea-ASEAN Shipbuilding

With Asian shipyards accounting for nearly 90% of the world shipbuilding market, 11 Korea is moving to expand blue-ocean competitiveness via establishment of a creative

value chain with ASEAN countries. ● Angel for Indonesia's Blue Economy ● Korean Legend Inspiration for Viet Shipbuilding ● Milestone Success at Subic ● Korea-Malaysia Shipbuilding & Reliability-Building ● Korea-Singapore Sharing World-Class Vision 19 ● Marine Exhibitions in ASEAN & Korea 16 Offshore & Shipbuilding ● LNG Carriers.. Engine of Market Recovery in 2015 ● Hyundai Heavy Industries Wins US$1.94 Billion UAE Offshore Order ● DSME Advantage in KOGAS LNG Carrier Bidding ● SHI Safety Management Scores Top Level ● Korean Shipbuilders Suffering Earning Woes 20 60 Related Newsformation on Offshore & Shipbuilding 27 18 Marine Equipment ● Globally Recognized Leader in Marine Lighting ● Ensuring Safety & Optimized Ship Operation 20 Ports & Logistics ● Logistics Project With North Korea and Russia ● Transfer of Korea's Harbor Tech to Developing Countries 25 ● Busan Port Handled 1.5 Million TEU in Sept, 6.7% YOY 83 Related Newsformation on Ports & Logistics 30 22 Shipping About Newsformation ● Korea-Norway Marine Cooperation Seminar ● A unique BCS service, based on Shipping Warning System to be Developed

inofficial headline translation of 27 Related Newsformation on Shipping 29

marine industry-related organizations, 23 Related Industries ● companies, government agencies. etc. Roundtable on Ocean CCS Plant Industry

Responding to rising value of 60 Related Newsformation on Related Industries 33

"Creative Connectivity" in the era of 24 Tech & Certs ● "Hyperconnected Word", it aims to KOMERI Certified as RS-Designated Testing Body

maximize the distribution of news, 58 Related Newsformation on Tech & Certs 39

information, intelligence and insight 25 Finance ● via a combined on-&-offline 'Marine Finance Center' Launched in Busan

communistration system. Presently 26 Related Newsformation on Finance 41

the related on-line system is being 26 Region & Cluster ● operated on a pilot basis. The full- Korea Develops Energy Saving Vessels ● dress big data-type service will be Busan City Attracts Chinese Ship Parts Firm

available soon. For more information, 29 Related Newsformation on Region & Cluster 42

e-mail us at [email protected] 45 Directory ● KOMEA Member Companies

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Company / Organization Index (In Alphabetical order)

Name Cases Page Name Cases Page

Abu Dhabi Marine Operating Company (ADMA-OPCO) 1 17 Korea Gas Corporation (KOGAS) 1 17

Asia Wind Energy Association 2 33, 43 Korea Institute for Industrial Economics & Trade 1 6

Batam-Bintan-Karimun Free Trade Zone (FTZ) 1 11 Korea International Boat Show 1 14

Bank of Korea (BOK) 2 41 Korea Marine Equipment Research Institute (KOMERI) 5 24, 39

Busan Branch of Korea Industrial Complex Corp. (KICOX) 1 6 Korea Offshore & Shipbuilding Association (KOSHIPA) 1 6

Busan Metropolitan City 3 6, 22, 26 Korea Research Institute of Ships & Ocean Engineering (KRISO) 1 23

Busan Port Authority (BPA) 41 20, 30, 31, 32 Korea Shipowners' Association (KSA) 4 29

BW Group 1 16 Korean Register of Shipping (KR) 5 6, 39, 40

Cameron LNG 1 16 K-sure 5 25, 41

Clark Research Studies 1 13 KTB Investment & Securities 2 27, 28

Daewoo Shipbuilding & Marine Engineering (DSME) 18 16, 27, 28 Maran Gas Maritime Inc. (MGM) 2 16

Daeyang Electric 1 18 Ministry of Oceans & Fisheries (MOF) 239 21, 23, 29, etc

Daishin Securities 3 17, 27, 28 Misc Berhad (Misc) 1 16

Dongnam Institute for Regional Program Evaluation (IRPE) 1 6 Mitsubishi Heavy Industries (Mitsubishi) - Japan - Moss 1 16

E*Trade 6 28 Mitsui O.S.K. Lines (MOL) 1 16

Export-Import Bank of Korea (KEXIM) 1 25 Mokpo City 1 42

Fn Guide 2 17, 22 Mokpo National University 1 26

GasLog Ltd 2 16 Mokpo Univ. 1 42

Gazprom of Russia 1 16 Ministry of Trade, Industry and Energy (MOTIE) 90 33, 34, 37, etc

GDF Suez 1 16 Nippon Yusen Kabushiki Kaisha (NYK) 1 16

Golar LNG Limited (Golar) 1 16 Norway's Ministry of Trade, Industry & Fisheries 1 22

Gyeonggi province 1 14 Oaktree Capital Management 1 13

Hana Daetoo Securities 1 6 Paragon Hotel Busan 1 6

Hanla IMS 1 19 POSCO 1 21

HHIC-Phil's Subic Shipyard 1 13 Royal Dutch Shell Plc. (Shell) 1 16

Hudong Zhonghua Shipbuilding (Group) Co. (HZ) 1 16 Russian Marine Register of Shipping (RS) 1 24

Hyundai Heavy Industries (HHI) 17 13, 17, 27, 28 Samsung Heavy Industries (SHI) 12 16, 17, 27, 28

Hyundai Merchant Marine 1 21 Samsung Securities 1 16

Hyundai Samho Heavy Industries 1 16 Shinhan Investment 1 27

Hyundai-Vinashin Shipyard (HVS) 1 12 Singapore Boating Industry Association (SBIA) 1 14

Int'l Maritime Organization (IMO) 1 24 STX Offshore & Shipbuilding 1 16

Incheon Port Authority (IPA) 19 30, 31 SUTL Global of Singapore 1 20

Kawasaki Heavy Industries (Kawasaki) 1 16 Teekay Corporation 1 16

Kawasaki Kisen Kaisha (K Line) 1 16 Univ. of Aberdeen Campus 1 42

Korea Marine Equipment Association (KOMEA) 1 6 Woori Investment & Securities 1 28

KORAIL 1 21 Yamal Project 1 24

Korea Eximbank 5 25, 41

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Issue & Focus

Expanding Common Prosperity Via New Value Chain

Clusterizing Korea-ASEAN Shipbuilding

With Asian shipyards accounting for nearly 90% of the world shipbuilding market, Korea is moving to expand blue-ocean competitiveness via establishment of a creative value chain with ASEAN countries.

Based on superior technology and reliability, Korean shipyards seem to believe that the era of one-nation dominance in the single global shipbuilding market is over, as they focus on collective regional cooperation, especially with ASEAN countries.

To facilitate the creative value chain drive, Korean shipbuilding and offshore policy initiatives are targeting a regional implementation of the former domestically oriented shared-growth vision, cluster Subic Bay in the Philippines. development and other patented best practices of the Korean Integral to the cluster blueprint is the expansion of shared growth, an shipbuilding industry. initiative that was launched to enhance cooperation and mutual success between large domestic shipbuilders and small and medium marine The concept of clusters, for equipment producers, to ASEAN counterparts. example, is moving beyond the Korean Peninsula. In the prevailing Such strategic alignments are expected to generate a new level of paradigm of a hyper-connected competitiveness given the complementary capabilities of related regional world, Korean shipbuilders believe industries, i.e. Korea, a member of the Big Three along with China and Japan, that the ASEAN region has the the Philippines, ranked fourth in the world, and Vietnam at number five potential to form profitable along with up and coming powers such as Indonesia, Malaysia, Singapore shipbuilding and offshore industry and others. clusters, similar to Hanjin Heavy Industries Shipyard operation at Korea-Malaysia

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Issue & Focus

Capitalizing on Korean Experience & Expertise

Angel for Indonesia’s Blue Economy

In accordance with new Indonesian President Joko benefits. Illustratively, bilateral cooperation in the marine Widodo's vision to revive the country’s past maritime equipment sector is evolving rapidly. glory, Indonesia is expected to take keener interest in the shipbuilding and marine industry, taking full advantage Indonesia's installed capacity for ship construction and of its status as the world’s largest archipelago. repair does not befit the country’s geographic character as an archipelago amid the busiest waterways in the fast- Inspired by the rapid emergence of the so-called “blue growing Southeast Asian region. Ideally, shipyard economy” paradigm, the shipbuilding sector is expected capacity would grow hand in hand with the shipping to provide a vital spark to energize deeper economic and business, but that has not been the case in Indonesia. industrial cooperation between Korea and Indonesia. Some 200 shipyards in the country have a combined While Korea is home to the world's top six shipyards, annual new-building capacity of around 800,000 dead Indonesia’s shipbuilding industry is targeting the weight tonnes (DWT) and maintenance capacity of 10 construction of larger vessels, up to 75,000 deadweight million DWT. While those figures represent significant tons, by 2015. Indonesia is especially focused on resource increases over the past years, they fail to accommodate transport with a priority on oil tankers as well as the needs of the growing national fleet, not least because compressed natural gas and liquefied natural gas carriers, many local yards are incapable of putting out large ships. sectors in which Korea has extensive expertise. Indonesia also has set a critical task to increase capacity and The Batam-Bintan-Karimun Free Trade Zone (FTZ) is capabilities at 200 shipyards under its latest blueprint for developing into a shipbuilding centre, capitalizing on its the industry. proximity to the financial hub of Singapore, where most of the investment comes from. While the success of the Capitalizing on Korea’s capabilities and Indonesia’s project has been the topic of debate, the FTZ does grant requirements, there are several joint government and industries operating within its borders significant benefits private sector efforts underway to achieve mutual in terms of taxation and duties.

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Issue & Focus

Fueling Viet Vision & Strategy to 2020

Korean Legend Inspiration for Viet Shipbuilding

The shipbuilding industry plays a very important role in capacity, a 1,500 meter length quay, one 450 Tons the development of the marine economy, which was Goliath crane, two 250 Tons Jib cranes and other Gantry identified as a major driver in the Sea Strategy of Viet Nam, & Jib cranes. HVS also upgrade, extended and invested a country with a 3,260km-long coastline and 1 million sqm more workshops such as Hull ships, Painting & Blasting of exclusive economic zones. The country's shipbuilding ships. Outfitting ships, and other utility plants to meet industry suffered the impact of the 2008 global financial new shipbuilding requirements. crisis, which led to a comprehensive restructuring of the country's leading shipbuilder, Vinashin. In October, 2014, the Prime Minister on approved an action plan to develop the shipbuilding industry into a Hyundai-Vinashin Shipyard Co., Ltd. (HVS) a joint- key industry under the implementation of Viet Nam's Sea venture company between Hyundai Group (Korea) and Strategy by 2020. The action plan pointed out that Vietnam Shipbuilding Industry Group was established on shipbuilding factories are scattered throughout the September 30th 1996 and specializes in ship-repair, country, with few factories meeting international conversion, and offshore fields since then. standards.

HVS has 100 hectares of land and 172.5 hectares of To tackle these problems, the plan focuses on open sea with the most modern facilities and equipment restructuring shipbuilding factories nationwide, as well as over 3,500 skillful employees including 80 developing a shipbuilding support industry, maritime korean experts with high skills and management transport market and ship repair service, as well as human experience to lead HVS to become the best shipyard in resources, and building capacity for research and the world. development (R&D).

HVS is fully equipped with states of the art facilities to Accordingly, three shipbuilding clusters will be accommodate new shipbuilding business field including established together with the foundation of an R&D 2 Graving Docks of 400,000 DWT and 80,000 DWT centre in the north.

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Issue & Focus

Hanjin Heavy Industries Investment Paying Off

Milestone Success at Subic

A showcase of the milestone success of the Korea- ceremony for five vessels at a time. In Korea, a large Philippines alliance in the shipbuilding and offshore shipyard once held a naming ceremony for four ships industry, HHIC-Phil's Subic Shipyard broke into the at the same time. In fact, Hyundai Heavy Industries set world's top 10 ranking with 1,757,000 compensated the world record by holding a naming ceremony for gross tons (CGT) for the first time in May 2014, five vessels at a time in March. according to Clark Research Studies. HHIC-Phil's Subic Shipyard finally held a naming Thanks to this landmark result, the Philippines has ceremony for five vessels at the same time for the cemented its position as the world’s fourth largest second time in the world and for the first time in the shipbuilding nation, setting the stage for another Philippines. economic takeoff. The five vessels are eco-friendly 5,400TEU container Thanks to the completion of HHIC-Phil's Subic carriers ordered by the global investor ‘Oaktree Capital Shipyard, the Korean shipbuilder was finally able to Management’. They were named ‘Wide Alpha’, ‘Wide overcome its limitation in building high value-added Bravo’, ‘Wide Charlie’, ‘Wide Delta’ and ‘Wide Echo’. vessels. Empowered by the improvement of mid- and long-term competitiveness, HHIC has established its The naming ceremony was held with the attendance ground to develop into the world's leading of nearly 200 related officials and investors including shipbuilder. Ahn Jin-gyu, President of Subic Shipyard, and Andrea Cramer, Vice President of Oaktree. At the ceremony, HHIC-Phil's Subic Shipyard made history again in the President Ahn said, “We are very pleased to go with world's shipbuilding industry by holding a naming renowned investors such as Oaktree.” He added, “We ceremony for five vessels at the same time. are going to keep moving forward to enhance our competence and maximize customer satisfaction with Around the globe, it is very rare to hold a naming high-tech, environment-friendly vessels.”

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Issue & Focus

Korea-Malaysia Shipbuilding & Reliability-Building

Malaysia represents a stable partner for the Korean Malaysia aims to capture 2pc global shipbuilding shipbuilding and offshore sector, importing US$205 industry by 2020. The country aims to capture 2% of the million in ship and offshore facility-related products in global shipbuilding industry by 2020 from 1% in 2010. 2012, a figure that accounted for 50.6% of Malaysia’s shipbuilding & offshore imports in that year. Malaysia has the right setting conducive for the industry being strategically located along the busy However, two-way trade in the marine equipment Straits of Melaka and the booming oil and gas sector, except for heat exchangers and a few other operations which employs a lot of vessels. items, has been meager due to the differences in industrial structure of the two countries -- Malaysian The industry has not only given employment to more shipyards primarily specialize in small and medium than 30,000 people, it has also contributed positively to vessels, whereas Korean producers concentrate on specialised skills development and technological higher value-added ships and offshore facilities. capabilities such as steel and aluminium welders, composite boat builders, naval architects and maritime Now, considering the Korean government policy engineers. The earliest Malaysia’s shipyard was built in initiative to encourage SME shipbuilders to concentrate Kuching. It evolved from under the tree along the on smaller vessels, leisure boats, etc., related trade Rajang River to a modern purpose-built yard in clusters between the two nations is expected to increase. In near Sungai Bidut and Rantau Panjang in Sibu and particular, Korea sees new opportunities associated Kuala Baram in Miri. In Peninsular Malaysia, the with the Malaysian Shipbuilding & Ship Repair Industry shipyard clusters are in Lumut, Port Klang. Strategic Plan 2020.

Korea-Singapore Sharing World-Class Vision

Korea and Singapore have developed unparalleled one-stop marine centre for shipowners, managers and business models for the success of their respective agents around the world. Generating an annual shipbuilding and offshore industries. Meanwhile, as the turnover of close to US$10 billion and employing some two Asian powers look to establish themselves as 100,000 workers, the marine industry plays a crucial international maritime hubs, there is an aspect of part in Singapore's economic growth. Ship repair and competition in their relationship. conversion form the backbone of the local marine industry, accounting for more than half of the total However, considering the greater potential embodied revenue. in cooperation despite the competition, Korea and Singapore can emerge as co-winners in the global A Memorandum of Understanding was signed shipbuilding arena. between Gueonggi province and the Singapore Boating Industry Association (SBIA) to cooperate on Reflecting the complementarities between Singapore leisure boating initiatives that would be mutually and Korea, Singapore remained Korea’s third largest beneficial to both parties. Gyeonggi province governor marine equipment export destination in 2013. Kim Moon-Soo and SBIA chairman YP Loke took part in the signing ceremony, alongside the Korea Globally reowned for its reliable and convenient International Boat show on the 12th June. range of comprehensive marine services, Singapore is a

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Issue & Focus

Generating Marine Biz Opportunities & More

Marine Exhibitions in ASEAN & Korea

In parallel with the growing marine economy in Korea and generating new opportunities for participants to and the ASEAN region, a number of related exhibitions are engage in business consultations, network and introduce held on a regular basis, creating new marketing platforms the latest products and services.

KORMARINE 2015

Frequency: Biennial Coming Event: Oct. 20-23, 2015 Venue: Busan Exhibition & Convention Center, Busan, Korea Organising Office: Ministry of Trade, Industry and Energy, Busan Metropotitan City No. of Visitors 2013: 43,044

Indonesian Maritime Expo (IME)

Frequency: Biennial Coming Event: Oct. 7-9, 2015 Venue: Jakarta Convention Centre, Jakarta, Indonesia Organising Office: PT Reed Panorama Exhibitions (RPE) No. of Visitors 2013: 4,105 No. of Exhibitors 2013: 178

Asia Pacific Maritime

Frequency: Biennial Coming Event: March 2018 Venue: Sands Expo & Convention Centre, Marina Bay Sands, Singapore Organising Office: Reed Exhibitions Singapore No. of Visitors 2014: 14,239 No. of Exhibitors 2014: 1,518

IMDEX Asia 2015

Frequency: Biennial Coming Event: May 19-21, 2015 Venue: Changi Exhibition Centre Singapore Organising Office: Experia Events Pte Ltd No. of Visitors 2013: 9,337 No. of Exhibitors 2013: 194

Marine Economy Korea 15

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Offshore & Shipbuilding

Korean Shipyards Supremacy Seen to Continue

LNG Carriers to Fuel Market Recovery in 2015

A rush of LNG carrier orders is shaping up, raising major Korean big shipyards expectations to escape the prevailing business slump. According to a tally by related business circles, around 15 carriers will be ordered on contracts in 2015.

Korea's big three shipyards Hyundai, Daewoo and Samsung plus Korean shipbuilder STX are now in competition to clinch three ice-breaking LNG carriers plus options to be ordered by Gazprom of Russia early in next year.

GDF Suez, in connection with its import deal with Cameron LNG, also plus to select shipyards to build two to six LNG carriers next Top Seven LNG Carriers Builders year. Daewoo Shipbuilding & Marine Engineering (DSME) Hyundai Heavy Industries including Hyundai Samho Heavy Industries Samsung already has been chosen to build three of five LNG carriers for Mitsubishi. In the STX Offshore & Shipbuilding Co. Ltd (STX) wake of selecting Daewoo to build three LNG Samsung Heavy Industries (SHI) carriers, Fredriksen Group is also poised to Hudong Zhonghua Shipbuilding (Group) Co. (HZ) order additional LNG carriers. Others Kawasaki Heavy Industries (Kawasaki) preparing for LNG carrier orders include Mitsubishi Heavy Industries (Mitsubishi) - Japan - Moss Gaslog and Maran Gas in connection with charter-based deal with BW Group. Source: Capex Forecasts

Despite the bright horizon for LNG- Top 10 Operators of LNG Carrier Market associated shipbuilding, the recent drop in oil Royal Dutch Shell plc, (Shell) prices is emerging as a negative factor for Nippon Yusen Kabushiki Kaisha (NYK) shipbuilding circles. Mitsui O.S.K. Lines, Ltd. (MOL) Misc Berhad (Misc) Samsung Securities analysts Young-soo Han said, “The Korean shipbuilding share price Teekay Corporation index fell 5% last week, after oil prices declined Maran Gas Maritime Inc. (MGM) following an Organization of Petroleum Golar LNG Limited (Golar) Exporting Countries decision to not cut crude BW Group output, while West Texas Intermediate crude GasLog Ltd and Dubai prices have fallen respective 31% Kawasaki Kisen Kaisha (K Line) and 33% over the past three months.”

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Offshore & Shipbuilding

Hyundai Heavy Industries Wins US$1.94 Billion UAE Offshore Order

Hyundai Heavy Industries Co., Ltd. (HHI), the world's biggest platform, a separation shipbuilder and a leading offshore facilities contractor, platform, an accommodation announced on November 12 that it signed a US$1.94 billion platform; laying 144 kilometers contract for the second package of the Nasr Full Field of subsea power and 55 Development Project with Abu Dhabi Marine Operating kilometers of infield cables; Company (ADMA-OPCO). modifying an existing manifold tower and two wellhead towers in Nasr oil field, 131 Per the contract, HHI will undertake engineering, kilometers northwest of Abu Dhabi, UAE and work for power procurement, construction, installation and commissioning distribution facilities from DAS Island to the super complex. work for the super complex, comprising a gas treatment

DSME Advantage in KOGAS LNG Carrier Bidding

DSME had the advantage in the Korea Gas Corporation In the competition, DSME (KOGAS)'s LNG carrier bidding competition when KOGAS received a high score because reported the final bid result for the LNG carrier on October 17. of its HiVAR-FGSS and PRS The bidding was essential in deciding the construction and system. HiVAR-FGSS is a fuel management company for LNG carriers that will transport supply system developed by shale gas from the Sabine Pass port in the U.S.A. to Korea. DSME. It supplies high KOGAS plans to build a total of six new LNG carriers. pressure natural gas to the engine from the fuel tank. The Partial Re-liquefaction System (PRS) reduces the cost of vessel DSME was chosen as the construction contractor for building maintenance by utilizing vaporized LNG gas in the cargo four initial LNG carriers. Two LNG carriers will be managed by hold as a refrigerant, thereby making the need for additional Hyundai LNG, while the other two will be managed by KLC. power sources and refrigerant compressors unnecessary.

SHI Safety Management Scores Top Level

Samsung Heavy Industries received the highest score in the insurers, has maintained a respected place in the industry for safety management evaluation from UK marine insurers. For over 100 years. JHC has been conducting the JH143 Survey the second time in a row, the company received an A in the every four years since 2003, when a number of accidents, JH143 Survey (shipyard risk management) conducted by the including fire and overturned cranes, took place at shipyards Joint Hull Committee (JHC). around the world. The survey comprises 13 evaluation indexes including emergency response planning, fire-fighting The Joint Hull Committee, founded in 1910 by UK marine capabilities, and safety regulations and procedures.

Korean Shipbuilders Suffering Earning Woes

The combined operating income of Korea's top five "Investors are wary of a continued slump for the fourth quarter." shipbuilders for the third quarter was estimated at 192 billion won, down from 234 billion won at the end of the previous Hyundai Heavy, the world's largest shipbuilder, shocked quarter, according to the data compiled by FnGuide, which investors by reporting an operating loss of 1.1 trillion won provides financial information. during the April-June period, widening from an operating loss of 189 billion won in the previous quarter, as it set aside "Their weak earnings for the third quarter had been broadly massive provisions against possible losses from ongoing expected," said Jun Jae-Chun, an analyst at Daishin Securities. projects and a stronger won undercut its earnings.

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Marine Equipment

Daeyang Electric Co. Ltd.

Marine Fluorescent

Lights

(HS Code: 9405 40 9000)

Globally Recognized Leader in Marine Lighting

On the strength of technology innovation and development, Daeyang Electric’s variety of fluorescent lights for marine applications has maximized the satisfaction for clients around the world due to reinforced technical specifications to be waterproof and resistant to vibrations within the ship’s hull. The products also are impact-resistant, protecting against shocks caused by waves and explosion-proof to prevent vessel fires.

Global Market Share: 24.7%, Dwarfing Runner-Up’s 6.0%

In 2013, Daeyang occupied the largest share in the global market in terms of production, at US$119 million, or 24.6% of the world's total production (US$482 million).

In 2012, Daeyang also posted the largest amount of exports (US$45.3 million, 74.4%), followed by another Korean firm, Kukdong Elecom (US$15.6 million, 25.6%). The company expects record exports of about US$47.6 million in 2014. At a Glance Global Market Scale Prospects: From US$509 Million in 2013 to US$736 Million in 202? - Business Type: Manufacturer - Established: May 1977 The global market for marine fluorescent lighting stood at US$509 million in 2013 and - Employee Number: 450 is expected to grow to US$568 million in 2017, US$614 million in 2019 and US$736 - Annual Sales: US$125 million million in 2024. - Export Amount: US$12 million - Certifications: LCIE, ABS, DNV, KR, Meanwhile, Korean production in the field is projected at US$252 million in 2024, NK, CCS, OHSAS 18001, ISO 14001 compared with US$174 million in 2013, US$194 million in 2017 and US$210 million in (Total 1,222 Certificates) 2019. Reinforced by Daeyang Electric's contribution, Korean market share is expected to Website: www.daeyang.co.kr average 34.2% over the 2013-2024 period. Contact Point

Competitive Edge: Moderate Price, High Quality - Contact: Eric Hwang Deputy General Manager, Dept. of Daeyang Electric's quality and technology competitiveness is rated alongside that of the Overseas Sales leading global companies in the field. However, based on its know-how and expertise, - e-Mail: [email protected] Daeyang can supply marine fluorescent lighting at moderate prices compared to - Tel: 82-51-200-5284 - Fax: 82-51-200-9589 international competitors.

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Marine Equipment

Hanla IMS

Level Monitoring

System

(HS Code: 9026102000 (9026.10-2000))

Ensuring Safety & Optimized Ship Operation

Hanla IMS, combining leading-edge technology with engineering expertise, supplies level monitoring systems, which are easy to install and integrate, to monitor and control liquid cargo levels within the vessel. Fully meeting all safety requirements, Hanla IMS systems are recognized globally for providing maximum return on investment, contributing to enhanced development, building a better world.

Hanla IMS's production of level monitoring systems reached US$8.1 million in 2013, accounting for 6% of the US$136.6 million global volume.

Hanla’s export of level monitoring systems exceeded US$8 million in 2013, representing 39.1% of all Korean exports in the segment.

Global Market Scale Prospects: From US$136.6 Million in 2013 to US$242.8 Million by 2024 At a Glance - Business Type: Manufacturer With the growing commitment to safety and environmental protection in the - Established: July 1989 maritime industry, global production of level monitoring systems is projected to - Employee Number: 150 reach US$242.8 million by 2024, an increase of 78% compared with US$136.6 - Annual Sales: US$38 million (2013) million in 2013. - Export Amount: US$18 million (2012) - Certifications: ISO 9001 / ISO 14001 Meanwhile, Korean production, led by frontrunner Hanla IMS, is expected to Website: www.hanlaims.com grow to US$48.8 million over the same period, 20% of the global total, compared with 15% in 2013 and 17% in 2017. Contact Point - Contact: Robert Jung Competitive Edge: The Power of Integration General Manager, Dept. of Technical Sales Hanla IMS is committed to best quality, best technology and best service based - e-Mail: [email protected] on its comprehensive product portfolio, which extends to ballast water treatment - Tel: 82-51-601-7000 systems (BWTS), with the rapidly expanding market for eco-ships around the - Fax: 82-51-831-1850 world.

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Ports & Logistics

Contact Due With SUTL Global

Marina Facilities to Be Built at Busan North Port

The Busan Port Authority (BPA) will promote its North Port Redevelopment (NPR) Project to build world-class marina facilities at the port.

On December 1, BPA revealed that it will finalize negotiations with SUTL Global of Singapore, which will submit a business proposal for the BNP marina facilities in December, and conclude a port facility contract with SUTL in January next year.

Under the contract, SUTL will invest a total of 65 billion won to build clubhouses, facilities for mooring 200 ships, yacht academy, etc. in the marina district of the NPR project and operate the facilities over the next 35 Investment Promotion Act, and with ways for SUTL to years. pay proper usage fees and manage the waterfront of the marina being adjusted, the North Port Marina Project During the operation period, the marina facilities are 'rode the crest of a wave.' projected to bring about 2.2 trillion won in economic effects (production value, added value, income Established in 1965, SUTL Global is an international inducement and other benefits) and create 22,000 jobs leisure development investment enterprise having 21 (recruitment and employment inducement). marina clubs and networks in 11 countries. It operates "One 15 Marina Club' on Singapore's Sentosa Island, Since its selection of SUTL as the priority negotiation which was selected as 'The Best Marina in Asia' in 2009 partner for the marina project in 2011, BPA has not made and 2014. any progress in about three years of negotiations due to differing opinions on port facility usage fees, usage SUTL plans to induce 'Volve Ocean Race,' one of the methods, etc. world's third largest yacht races, to Busan by around 2020 and pursue increased tourism as well as activation Responding to SUTL's request for exclusive of regional economies. management and use of reclaimed land (25,438m2) and public waters (56,913m2) to build the leisure ship BPA President Lim Ki-Taek emphasized, "Construction mooring facilities, floating breakwaters, etc., BPA had of marina facilities at the North Port will blow favorable insisted that SUTL pay occupancy and usage fees (1.84 wind into the NPR Project and also contribute billion won/year) in line with current regulations related significantly to the invigoration of regional economies to public waters. and creation of good-quality jobs while providing Busan citizens with opportunities to experience diverse marine However, BPA recently changed the business model to leisure and cultural programs." a site usage method in accordance with the Foreign

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Ports & Logistics

Logistics Project With North Korea and Russia

South Korea plans to bring in 35,000 tons of Russian coal year, according to government sources. Ryoo Kihl-Jae, a through the North Korean port of Rajin in November. Korean Unification Ministry official, said: "About 35,000 tons of Russian coal will be shipped to the South Korean port of The test run is part of the government's push to join the Rajin- Pohang in November through the Rajin port as an test Khasan logistics project, which links the North Korean port shipment. The government plans to provide necessary city, located in the northern tip of the country, to Russia's support for the firms' push for the project." Trans-Siberian Railway. Three Korean firms; KORAIL, POSCO and Hyundai Merchant Marine, are currently working on a The South Korean government has been promoting South consortium to join the North Korea-Russia project. Korean firms' participation in the logistics project, which it views as closely linked to President Park Geun-Hye's "Eurasian Having conducted two onsite inspections of the Rajin port Initiative," a vision that calls for building more infrastructure and the railroad between the port and the Russian city of and expanding trade between Eurasian nations to create what Khasan, the local firms are now in negotiations with the could become a large single market rivaling the European Russian side with the aim of striking a deal by the end of this Union.

Transfer of Korea's Harbor Tech to Developing Countries

The Ministry of Oceans & Fisheries (MOF) plans to invite effects through direct experience, including site visits to Busan about 40 harbor-related government officials of developing harbor redevelopment region, Busan New Port, Ulsan Port, etc. countries in Southeast Asia, South America and Africa to explain Korea's harbor development experience and policies To support the establishment of overseas human networks in as part of an overseas harbor development project being the harbor field, the ministry also plans to manage all the promoted intensively by the ministry. participants in the program continuously, after adding their information to a database, in order to share the latest harbor About 42 director-general and director-level harbor policy- project-related information and event data of the countries related officials of six countries, Myanmar, the Philippines, through utilization of SNS, blogs, etc. Director Lee Hee-Young Cambodia, Uruguay, Libya and Algeria, will participate in the of the ministry's Port Investment Cooperation Division said, invited training program for 10 days on four occasions from "The invited training program for high-ranking government September to November. With the program as momentum, officials of developing countries is an important event to the ministry intends to publicize Korea's excellent engineering strengthen Korea's partnership with these countries." and construction technologies and maximize the invitation

Busan Port Handled 1.5 Million TEU in Sept, 6.7% YOY

Busan Port handled 1,509,634 TEU in September, an increase and Europe (32,271 TEU) decreased 6.9% and 14.9%. of 6.7% year on year. The ratio of T/S cargo by nation is as follows: China 32.9%, According to Busan Port Authority (President Lim Ki-tack) on Japan 14.5%, USA 12.2%, and Europe 4.2%, which account October 23, Busan Port handled 749,875 TEU of for 63.8% of the total transshipment cargo volume. import/export cargo and 759,760 TEU of transshipment cargo in September, increases of 4.4% and 9.2% respectively The cumulative total handled in September 2014 at Busan compared to the previous year. Port was 13,702,654 TEU and the cargo handling ratio between New Port and North Port was 65 to 35 compared The transshipment cargo volume continues to grow, with 62 to 38 last year. The cargo volume at Busan New Port accounting for over 50% of the total cargo volume at Busan has gradually increased. Busan North Port handled 541,733 Port. By nation, the T/S cargo of China (249,589 TEU), USA TEU in September, an increase of 2.2% YOY, while New Port (92,698 TEU), and Russia (24,287 TEU) increased 18.4%, processed 967,901 TEU, up 9.4%. 3.6%, 6.9% respectively, while that of Japan (107,702 TEU)

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Shipping

Korea-Norway Marine Cooperation Seminar

The Ministry of Oceans & Fisheries (MOF) The participants also reviewed the status of a participated in the Korea-Norway Marine research study on activation and operation of the Cooperation Seminar on November 18 in Oslo, the Arctic sea route, which is being jointly carried out Norweigian capital, in order to strengthen bilateral by the two countries, and discussed improvement cooperation in shipping and logistics fields, methods, In the policy seminar, furthermore, including the Arctic sea route. related experts made presentations and initiated discussions. Director-General for Shipping & Logistics Jun Ki- Jeong of MOF and Director-General Ida Skard, Director-General Jun said, "Norway is an advanced Maritime Department, Norway's Ministry of Trade, marine country playing a lead role in green marine Industry & Fisheries, participated in the seminar as fields, including operation of the Arctic sea route senior representatives and discussed ways to and reduction of maritime greenhouse gas facilitate mutual cooperation in exchanges of emissions. Through the seminar, Korea came to information on operation of coastal passenger ships better understand international trends and and revamp of safety management systems, stable benchmark related policies and also foresees supply of sailors, welfare policies for sailors, etc. reinforced cooperation on issues of common interest between the two countries."

Shipping Warning System to be Developed

Busan Metropolitan City from foreign exchange crisis in 1997 and global announced on November 26 financial crisis in 2008. that Maritime Exchange Information Center has been selected as a Except for monitoring change in shipping market development organization to establish 'Shipping condition, the early warning system will also market early warning system' of the Ministry of scientifically analyze various global economic Maritime Affairs and Fisheries. variables which influence the market crisis as well as the other variables in shipbuilding and finance Shipping market early warning system aims to sectors. Then, the system will deduct correlations perceive crisis in shipping industry preemptively among them and develop early warning index based on several economic indicators and market which has high market prediction capacity based on information. With this, the industry is capable of the deduction. taking a prompt action. The center plans to expand existing shipping A necessity for the system has been raised since market data base (DB) jointly with Fn Guide, a economic recession had been continued in shipping financial quotient specialized company, develop the market due to delay in recovery of real economy early warning index and complete its verification. and oversupply of ships, following huge damage

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Related Industries

Under Management of KRISO

Roundtable on Ocean CCS Plant Industry

On November 27, the Ministry of Oceans of the 'Ocean CCS Transport & Process & Fisheries (MOF) held a roundtable Plant Research Project,' which meeting on the ocean CCS plant include about 15 domestic and industry at the Seoul Press Center overseas patent appl