It s reported that South Korea's shipping agencies are set to establish a shipyard that specializes in repairing ships with high added value after forming a consortium. It is the first time that shipping agencies are joining to build a repairing shipyard.

According to the industry, Korea’s seven middle sized shipping agencies formed a consortium to create the tentatively named Busan New Port Repairing Shipyard Corporation and recently suggested its business proposal.

The repairing shipyard will be located nearby Busan New Port in western Busan and cover an area of 185,000 square meters. A source close to the consortium said that “Busan New Port is a good place to run the ship repairing business since it is crowded with shipbuilding companies. The consortium can secure 70% to 80% of the total sales only by repairing ships of the shipping agencies belonging to the consortium.”

Shipping agencies participating in the consortium include Korea Marine Transport Co, Namsung Shipping Co, Korea Line Co, Pan Continental Shipping, Sunwoo Shipping, KSS Line Shipping and Hyopsung Shipping. The consortium will be jointly led by Hyopsung Shipping and Namsung Shipping Co.

In its proposal, the consortium said that "Even though Korea is a shipbuilding powerhouse, its shipping agencies have to send its middle to large scale ships in need of repair to other Asian nations including China and Vietnam. Since no Korean shipyard is capable of examining and repairing large ships, Korea has no choice but to waste a large amount of foreign currencies. Also, there is a risk that shipbuilding technologies would be leaked in the repairing process."

After considering validity of the business, the ministry will decide whether to approve the shipyard construction by the end of 2008. Other shipping agencies are also scheduled to suggest a business proposal to establish a repairing shipyard to the ministry.