[🇧🇩] Ship Building Industry in Bangladesh

Krishna with Flute · Jan 30, 2025

Bilal9 said:
Other than larger sizes - I believe they build pretty much everything, under 10000 tons that is.

I don't know what you refer to that they have not built.

Here is a partial list form just one ship yard.

Western Marine Shipyard Limited Shipyard - Magicport

Discover the ships produced by Western Marine Shipyard Limited Shipyard and get details and contact information for shipbuilding and repair services.

magicport.ai

This one was a specialized build for New Zealand to ferry people within the Cook Islands.

View attachment 13839

View attachment 13841

This one below was a Kenyan Navy build with speed close to 35 knots (uses twin waterjets as power).

View attachment 13840

That is what Exactly I had said. BD's Ship building Industry is vibrant. I only disagree with that part of post in which you said that BD need investment to catch up with India which I don't think is possible even with huge investment in sector.

Bilal9 · Jan 30, 2025

There is also very high local demand for bulk carriers and even container carriers within our borders and river routes. Here is an example of a riverine container carrier within Bangladesh built locally. Hundreds of them are built every year, both passenger and container carriers.

This one below was a medium sized build for a client in Germany by Western Marine. This is the Elbe river in Germany. The cargo is wind turbine blades.

The one below is a Navy large patrol craft (LPC) made in one of the Navy yards in Bangladesh. These are modern vessels armed with anti-ship missiles and torpedoes.

Bilal9 · Jan 30, 2025

This is one of many common designs for riverine cargo carriers and tankers. This one is a mini bulk-carrier in Bangladesh.

At any time - there are at least a couple of hundred riverine ships anchored in the Karnaphuli river near Chittagong Port which serve the river ports further inland.

Bilal9 · Jan 30, 2025

Krishna with Flute said:
That is what Exactly I had said. BD's Ship building Industry is vibrant. I only disagree with that part of post in which you said that BD need investment to catch up with India which I don't think is possible even with huge investment in sector.

Well one could argue otherwise. Witness what happened in Korea as far as govt. policy help and investments in shipbuilding.

HYUNDAI (HHI Ulsan), DAEWOO (DSME), STX and SAMSUNG could not develop without massive investments.

Korea is a small place - smaller than even Bangladesh. Their shipbuilding sector however is many times larger than that of India, even today, even after Chinese exceeded their shipbuilding sector.

Size of a country is no factor if government subsidies are bolstered - which are a critical starting point for developing shipbuilding capabilities and what occurred in Korea.

In Ulsan, HHI yards are a sight to behold, I have been there a few times. The picture shows some 100,000 ton builds in progress.

Bilal9 · Jan 30, 2025

I will insert the article in Marine Policy Journal by DongKeun Lee which assesses (citing the South Korean example) on what steps small nations can undertake policy and govt.-investment-wise to compete and improve their position as shipbuilding nations and ship-exporters.

Most Bangladeshi movers and shakers (shipping ministry govt. nokars i.e. policymakers) have little clue in how to grow the shipbuilding sector in Bangladesh again, which was a maritime power of repute from time immemorial. This is a huge labor-value-addition sector and could be the next apparel miracle.

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Influences behind the development of South Korea’s shipbuilding industry from the 1960s to the 2000s

Author links open overlay panelDongkeun Lee
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Abstract

From the 1960s to the 2000s, the Republic of Korea (ROK) witnessed the rapid development of its shipbuilding industry, establishing itself as one of the world’s largest shipbuilders. This article seeks to answer the question of what drove the rapid development of South Korea’s shipbuilding industry. It accomplishes this by examining both classical sea power theory and the unique South Korean shipbuilding development model of the 1960s to the 2000s. Drawing from primary sources obtained from the ROK Presidential Archive and secondary sources, including newspapers and scholarly articles, this paper concludes that a combination of classic drivers of sea power development – including maritime commerce and threats – and the unique South Korean model, characterised by government subsidies and investments in both commercial shipbuilding and warship construction, contributed significantly to the development of South Korea’s shipbuilding industry. Finally, by learning from South Korea’s experience, developing and middle power countries looking to establish their shipbuilding industry should consider subsidising the industry in its early stages and contributing to a healthy ecosystem by investing in both commercial and warship construction.

Keywords

Sea-Power
Ship-building
Chaebol
South-Korea

1. Introduction

As a country located on a peninsula surrounded on three sides by water, the Republic of Korea (ROK) heavily relies on seaborne trade. South Korea’s economic dependence on maritime trade is more pronounced than that of other states located on peninsulas, such as Italy, due to the division between North and South Korea. As the Democratic People’s Republic of Korea (DPRK) blocks the land-based trade routes of the ROK, South Korea now has become a de facto island country that does not have access to land trade routes.
Despite its geopolitical circumstances that are favourable to sea power development, the history of South Korean shipbuilding is relatively short. Right after the establishment of the republic, the Korean Peninsula was divided into two different countries. North Korea even initiated the Korean War in 1950 and, the largest security threat to Seoul has always been Pyongyang since then. Such a security environment led to the neglect of South Korean sea power development. In fact, the major security threat from North Korea was ground-based, so the ROK did not have a strong incentive to prioritise sea power development over land power development [1]. Indeed, South Korea experienced the influence of sea power during the Korean War, notably due to the operations of the United Nations Command (UNC) naval forces, including the Battle of Inchon. However, this did not lead the government to consider sea power as an important element of power for South Korea, as most studies of the Korean War were written based on ground battles. Some even argued that the majority of the battles during the Korean War took place on the ground, and thus, air and sea power only played supportive roles [2]. These biased Korean analyses resulted from a lack of understanding of joint operations within the ROK Armed Forces during the Korean War. The majority of military decision-makers were army generals, and they considered the goal of the Korean War to be the reunification of the Korean Peninsula through land occupation [2]. Eventually, despite the critical role of sea power during the Korean War, the ROK ended up prioritising land power over sea power. Moreover, the South Korean economy was very poor after the Korean War and during the 1960s, foreign trade only accounted for 15 per cent of its GDP [3]. Thus, Seoul did not invest in its sea power, and relied on the United State (U.S.) to protect its sea lines of communication (SLOCs) [4].
However, the geopolitical environment of South Korea began to change during the 1970s, altering the dynamics of its shipbuilding industry. As South Korea strengthened its land borders to address North Korean military provocations, the DPRK sought to avoid direct clashes on land and increased limited military provocations in the waters, where South Korea had invested less in protection [5]. Consequently, South Korea recognised the need to invest in sea power to safeguard its maritime border. As a result, the country developed a greater interest in naval capabilities, leading to the establishment of an indigenous shipbuilding industry during this period. While South Korea could have chosen to purchase U.S. warships, Seoul decided to pursue the indigenisation of its shipbuilding industry due to both political and economic reasons. Despite its relatively short history, South Korea has now achieved full indigenisation in warship construction, with 100 per cent of the Republic of Korea Navy (ROKN) warships being built domestically [6] by internationally well-known chaebol enterprises such as Hanwha Ocean, Hyundai Heavy Industries, and Samsung Heavy Industries.1
The ROK has now become one of the emerging warship exporters based on these industries, and therefore, it is important to understand the nature of chaebol shipbuilders when understanding South Korea’s shipbuilding capability development. Interestingly, despite the increased strategic value of warship exports, the decisions behind the exports are often determined by commercial interests instead of strategic reasons. For instance, the Korean defence industry, Dae Sun Shipbuilding, exported an amphibious warship to the Tatmadaw in 2020 despite the humanitarian crisis in Myanmar [7]. Considering that the military junta in Myanmar is violating international norms, which South Korea respects as a liberal democratic country, the weapon exports to the Tatmadaw should have been regarded as a self-violation of national interest [8]. In fact, there was a testimony of a former Tatmadaw member regarding the use of a South Korea-exported warship during the civil war, which involved human rights violations [9]. Nonetheless, such geostrategic considerations do not often influence South Korea’s weapon exports, which shows that commercial interest is still a key driving factor of warship exports.
This makes South Korea a rare case study with an interesting relationship between the chaebols and national security. Indeed, there have been numerous other historical cases in which military threats were key driving factors for the development of shipbuilding capabilities in a short time period. Examples include Sparta before the Peloponnesian War during the 5th century BCE vis-à-vis the Athenian sea power and the Imperial German Navy during the late 19th to the early 20th centuries vis-à-vis the Royal Navy. However, the commercial shipbuilding business was not involved in these two cases, making the ROK an intriguing case study to investigate.
Why and how, then, did South Korea choose to develop its shipbuilding industry rather than purchasing advanced U.S. warships? This article aims to address this question by examining both primary sources, including South Korea’s presidential archival records, and secondary sources, such as scholarly and newspaper articles spanning from the 1960s to the 2000s. The starting point for this analysis is the 1960s, as this is when South Korea’s shipbuilding industry took its initial steps. The endpoint for South Korea’s shipbuilding industry development is set in the 2000s, as it marks the time when the industry began to demonstrate a sophisticated contemporary model. As briefly discussed earlier, geopolitical reasons played a pivotal role in propelling the growth of South Korea’s shipbuilding industry. Furthermore, distinctive government subsidies provided to chaebol enterprises have further contributed to the indigenisation of the industry. The article begins with a theoretical discussion of shipbuilding capabilities and sea power. It is followed by a chronological analysis of findings from primary and secondary sources in the subsequent sections. By offering insights into the research question, this article presents a potential model for indigenising the shipbuilding industry in developing and middle power countries that industrialised after the Second World War.

2. Sea power and shipbuilding capability

Without a doubt, the history of the shipbuilding industry is closely linked to the development of sea power in a country. Several scholars argue that sea power is a crucial element of national power that protects and promotes a country’s maritime commerce [10], [11], [12]. Naval capability is often considered a key indicator of sea power since navies play a vital role in defending a state’s maritime trade. Therefore, shipbuilding capability, which contributes to naval capability as well as maritime commerce capabilities, must be recognised as an essential aspect of sea power [12], [13]. In fact, major shipbuilding industries are typically found in countries with competitive naval capabilities as well as maritime trade.
Daniel Todd and Michael Lindberg conducted an in-depth study on the symbiosis between navies and shipbuilding industries. They argued that shipbuilding industries are heavily influenced by the demands of navies. In their work, they investigated both the supply side (shipbuilders) and the demand side (navies). They concluded that countries with strong navies typically have well-developed shipbuilding industries to meet naval demands [14]. According to Todd and Lindberg, navies can be classified into ten different hierarchies based on three elements: force structure (types, size, and the number of ships and aircraft), sustainability (ability to maintain naval forces on station), and flexibility (ability to perform missions in multiple geographical areas). These three elements are crucial as navies are often deployed beyond their territorial waters to protect maritime commerce. Therefore, Todd and Lindberg’s classification aligns with the conventional definition of sea power [15]. Additionally, they introduced the ‘World Naval Shipbuilding Capability Hierarchy’ to measure shipbuilding capabilities. This hierarchy consists of six ranks, with two important indicators being the percentage of domestically built warships and domestic design capabilities. Todd and Lindberg’s classifications show that naval hierarchy and shipbuilding hierarchy are aligned, indicating the close interconnection between shipbuilding industries and a state’s sea power [16].
Table 1. Todd and Lindberg’s Naval Hierarchy (updated based on current data and building on Kirchberger’s update in 2012 and Grove’s work in 2014) [15], [17], [18].

Rank	Examples	Inventories	Definition
1	US	All larger ship types in high numbers	Global-reach Power-projection
2	France, UK and China1)	CVN, other aviation-capable ships, many SSN/SSK, and many support ships	Limited Global-Reach power-projection
3	India, Russia, Italy and Japan2)	CVL, other aviation-capable ships, submarines, and enough support ships	Multi/Extra-regional Power-projection
4	South Korea3), Australia, Canada and Taiwan	Aviation-capable ships (DD, FF), submarines, and some support ships	Regional Power-projection
5	Singapore, Sweden and Saudi Arabia	Only smaller ships (FF, Corvettes), no underway replenishment	Regional Offshore Coastal Defence
6	North Korea, Vietnam and UAE	Only smaller ships (Corvettes, FAC)	Inshore Coastal Defence
7	Ireland, Iceland and Uruguay	Lightly armed OPV, PB and PC for coast guard type duties	Regional Offshore Constabulary
8	Bahamas, Senegal and Sri Lanka	Only Patrol Boats and Patrol Craft	Inshore Constabulary
9	Azerbaijan, Cambodia and Laos	Patrol Craft	Inland Waterway
10	Fiji, Palau and Solomon Islands	Often only 1 or 2 craft	Token Navies

Notes: 1) China was group four in 2012, but Grove assessed it as group two in 2014. 2) Japan was group four in 2012, but Grove assessed it as group three in 2014. 3) Grove assessed South Korea as group three, but the author categorises it as group four. See further discussion below.
Eric Grove suggested a different naval hierarchy in 2014 research based on his updating of Michael Morris’ original work in 1987. Unlike Todd and Lindberg, who classified naval hierarchy into ten different levels, Grove categorised navies into nine rungs, but the criteria for typology were quite similar. Like Todd and Lindberg, Grove also regarded the navy’s ‘force projection’ capability as a key measurement of naval hierarchy, meaning that he believed the navy’s primary role is to be deployed overseas to achieve national interests, including protecting maritime commerce [17]. This is not fundamentally different from the conventional definition of sea power, which implies that the measurement of naval hierarchy by Todd and Lindberg, and Grove are very similar. However, unfortunately, Grove did not include the analysis of shipbuilding in his work. Therefore, for the assessment of shipbuilding hierarchy, this article mostly relies on Todd and Lindberg’s system of classification. Still, for the naval hierarchy measurement, this article considers both assessments by Todd and Lindberg, and Grove.
Table 2. Todd and Lindberg’s Shipbuilding Capability Hierarchy (updated based on current data) [19].

Rank	Examples	Percentage of Domestically Built Combatant Ships	Maximum Tonnage Capability	Design Capability
1	China, France, Russia, UK, US, South Korea1) and Japan1)	100	10,000+	Full
2	Germany, India, Italy and Spain	70+	3000–10,000+	Full/Limited Foreign Assistance
3	Netherlands, Norway and Sweden	75+	3000–9999	Full
4	Canada2) and Australia	30–50	3000–9999	Developing Still Dependent on Foreign Assistance
5	Indonesia, Singapore and Thailand	40	< 1000	Very Limited
6	Philippines, Myanmar and Sri Lanka	0	< 500	None or Very Limited

1) South Korea and Japan used to be group two in 1996
2) Canada was group three in 1996
According to Todd and Lindberg’s classifications, South Korea was ranked fourth out of ten in terms of naval hierarchy, indicating that the ROKN was a regional navy with limited power projection capabilities. In terms of shipbuilding capability hierarchies, South Korea was ranked second out of six, indicating that more than 70 per cent of warships were built domestically [19]. Considering their book was published in 1996, how have South Korean naval and shipbuilding capabilities changed since then? Following their classifications, the naval capability hierarchy remains the same. In 2012, Kirchberger updated the naval hierarchy table but, South Korea remained in group four of the table [18]. However, according to Grove’s assessment in 2014, the ROKN has risen to group three, as he believed that its Aegis system-equipped destroyers, large submarine flotilla, amphibious, and replenishment forces play an important role in supporting South Korea’s limited global power projection [20]. Nonetheless, even as of 2023, the ROKN does not possess nuclear-powered submarines, which Grove believed to be an important element of sea power to support forward-deployment missions [21]. South Korea’s major submarine fleets are still conventional submarines, which have limited capabilities in terms of global deployment. Moreover, the Republic of Korea Ship (ROKS) Dokdo, which is an 18,800-tonne amphibious assault ship in terms of fully loaded displacement, has demonstrated that the ROKN has a limited forward-deployment capability. When the ROK decided to deploy the UN peacekeepers in response to the 2010 Haiti Earthquake, ROKS Dokdo was considered to be an asset for deployment. However, its deployment was cancelled since it could not pass the Panama Canal due to its size [22]. This shows that although the ROKN now possesses better assets compared to the 2012 and 2014 assessments, its function is still limited in terms of extra-regional power projection, which means that it needs to be categorised as group four.
However, there has been advancement in the shipbuilding capability hierarchy compared to 1996. South Korean warships are now entirely built and designed domestically, resulting in the advancement of the South Korean shipbuilding capability hierarchy from group two to group one. Within the group two countries, which includes Germany, India, Italy, Japan, South Korea, and Spain, only South Korea and Japan have advanced their shipbuilding capabilities to reach group one. This makes the South Korean shipbuilding industry a unique case study, considering that shipbuilding is highly technological and labour-intensive, making it challenging to expand the industry’s size.
Indeed, Japan has also successfully advanced its shipbuilding capability hierarchy to the first group, and some can argue that the Japanese case is as unique as the Korean shipbuilding case. However, there are other factors that make the South Korean case more intriguing compared to the Japanese case. The history of South Korean shipbuilding is relatively shorter compared to other major shipbuilding countries, and South Korea is a late industrialised middle power country with limited resources and population. Most major shipbuilding countries, including China, the U.S., Russia, and Japan, either have a long history of shipbuilding due to early industrialisation during the 18th and 19th centuries or substantial resources such as manpower and a strong economy to allocate to the shipbuilding industry. South Korea stands as an exception in both cases and is perhaps the only successful country that possesses a high level of shipbuilding capability without those factors. In fact, some countries that fall into a similar category as South Korea, such as Saudi Arabia and Australia, do not have sufficient shipbuilding capabilities to fully meet the demands of their navies because, for late industrialised countries without sufficient manpower, it is not economically rational to build indigenous shipbuilding industries as the initial costs of investing in shipbuilding industries can result in soaring expenditures [23].

3. South Korea and shipbuilding

Then what were the key driving factors behind the development of South Korean industries? The majority of previous literature has answered this question by pointing to government subsidies that protected South Korean shipbuilding from foreign competitors. Most of these studies asserted that South Korea’s military dictator, Park Chung-hee, who served as the country’s president from 1963 to 1979, heavily subsidised the so-called chaebol companies to boost the national economy, and shipbuilding was among them [24], [25]. However, most of the earlier literature relied solely on secondary sources in English to support their arguments, potentially leading to incomplete analyses. Furthermore, while these analyses recognised that Park’s decision was a key driver in the emergence of South Korea’s shipbuilding industry, they did not deeply investigate the intentions behind Park’s decision. Thus, this article seeks to address this gap by analysing first-hand sources obtained from South Korea’s presidential archives. Given that the archive was established in 2007 and there is limited research regarding South Korea’s shipbuilding conducted using records from the presidential archive, this article is expected to make a valuable contribution to the ongoing debate on how developing and middle power countries can nurture their indigenous shipbuilding capabilities.
It is also essential to consider the classic driving factors of sea power development, such as the maritime threats and maritime commerce interests in the South Korean context. As briefly mentioned earlier, sea-based North Korean military provocations escalated during the 1970s, coinciding with South Korea’s increased reliance on maritime trade [5]. Consequently, the ROK’s decision to develop sea power in the 1970s was logical. This aspect will also be explored through an examination of President Park’s records.
Another unique feature of the South Korean shipbuilding industry stems from the joint construction of civilian ships and warships. In most advanced industrial countries, warship building and commercial shipbuilding are typically separate endeavours [26]. For example, although the U.S., the UK, and Russia are known for their domestic warship construction, these countries do not possess competitive commercial shipbuilding industries. However, in South Korea, major warship builders such as Hanwha Ocean and Hyundai Heavy Industries are involved in the construction of tankers and cargo ships as well. Japan follows a similar approach, with warship builders like IHI Corporation and Mitsubishi Heavy Industries also engaged in the production of commercial vessels. Nevertheless, as mentioned earlier, given South Korea’s late industrialisation, it is unique to maintain such a large-scale presence in both commercial and warship construction. The impact of commercial shipbuilding on the ecosystem of South Korean shipbuilding industries will be discussed in detail in the findings section as well.

4. Commercial shipbuilding – 1960s

The primary driving factors behind South Korea’s shipbuilding industry in the 1960s were the growth of commercial shipping and significant subsidies under the Park Chung-hee government. It’s worth noting that the focus during this period was on developing commercial shipbuilding rather than constructing warships. In 1962, President Park introduced the Five-year Economic Plan, a pivotal shift that transformed South Korea’s economy into an export-oriented one. This plan set ambitious goals, aiming to quadruple South Korean exports within five years [27]. President Park’s economic transformation plan proved successful. By 1967, South Korea’s trade accounted for 29 per cent of the country’s GDP, representing a 10 per cent increase compared to 1962 [3]. Recognising the importance of shipbuilding capabilities to support this surge in exports, President Park’s government took further action. In 1967, it implemented the ‘Shipbuilding Industry Promotion Law’ to bolster South Korea’s shipbuilding sector, providing the rationale for substantial subsidies to the shipbuilding industry. Articles 4 and 5 of the law empowered the government to subsidise the domestic shipbuilding industry and provide loans to the industry as needed [28].
Operating under the provisions of this law, the ROK government provided funding to several companies, including both state-owned and private enterprises. An example of a state-owned company was the Korea Shipbuilding Corporation, and a privately owned company was Hyundai Heavy Industries [29]. These shipbuilding firms played a crucial role in the shipbuilding industry during the 1960s. With government support, these companies initiated the transformation of South Korea’s shipbuilding industry, transitioning it to steel shipbuilding [30]. Prior to this period, South Korea’s shipbuilding industry primarily focused on wooden ships. This government subsidy marked the beginning of South Korea’s acquisition of indigenous shipbuilding capabilities, which extended to the construction of warships. Notably, the Korea Shipbuilding Corporation later evolved into HJ Shipbuilding & Construction Co., Ltd. and Hanwha Ocean, key South Korean warship builders today.
President Park’s interests in shipbuilding industries are also visible in a number of speeches that he gave. In August 1967, during the commissioning ceremony of the first 6000 tonnes size tanker of South Korea, he said:
As the ROK is surrounded by water, the development of the shipbuilding industry is a very important project… The enlargement of ship size is an immediate task for us to minimise the outflow of foreign currency… [In the future], the Korea Shipbuilding Corporation will be able to build up to 10,000 tonnes size ships [31].
This speech shows the reason that South Korea decided to develop a domestic shipbuilding industry instead of purchasing foreign tankers. Fundamentally, the goal of the South Korean government during the 1960s was to increase the revenue from the foreign trade and thus, it was not ideal for the ROK to import foreign tankers. This is emphasised in President Park’s speech which emphasised the outflow of the foreign currency. In addition to his speech in 1967, President Park made another speech in 1968 which also emphasised the importance of shipbuilding in South Korea’s export-oriented economy.
When an economy grows, transport issues inevitably follow. There are various ways to transport goods, including railways, roads, and aircraft, but ships play the most significant role in terms of exports as they can transport the largest amount of goods [32].
This again shows that the intention behind President Park’s shipbuilding industry subsidy was economic development, and the increased trade boosted the shipbuilding industry of the ROK during the 1960s. This is an example that shows that classical sea power theory, which argues that maritime commerce drives shipbuilding, [10], [11], [12] can also explain South Korea’s shipbuilding industry development.
Why then did not South Korean shipbuilding contribute to warship construction during the 1960s? This can be explained by the military threats that South Korea faced during that decade. Throughout the 1960s, the majority of military clashes between South Korea and North Korea occurred on land, rather than at sea. While North Korea initiated 298 land skirmishes during the 1960s, maritime skirmishes occurred only 22 times. Therefore, land-based conflicts were the major threats faced by South Korea during this period [33]. Consequently, the government primarily focused on protecting its land borders rather than investing in warships. Furthermore, there were no substantial threats to South Korean SLOCs during the 1960s. The Soviet Navy and the People’s Liberation Army Navy had limited capabilities to interfere with South Korea’s SLOCs, and the U.S. Navy, which protected South Korea’s SLOCs, was far superior to them. As a result, the South Korean government did not have incentives to build warships and instead concentrated on commercial shipbuilding during the 1960s but this changed following a few maritime clashes during the late 1960s.