South Korea’s largest shipbuilder has moved well beyond traditional block outsourcing, splitting entire vessels between two yards in a first for the country’s shipbuilding industry HD Hyundai Heavy Industries has unveiled a radical new approach to managing its swollen orderbook, constructing ships in two separate halves across different shipyards before joining them together – a method that goes significantly further than the block outsourcing that characterised previous South Korean supercycles. The innovation was demonstrated publicly on earlier this week at HD Hyundai’s Ulsan shipyard, where a 157,000 dwt suezmax tanker took shape through the merger of two hull sections each exceeding 100 m in length. The 168 m bow section had been built by HSG Sungdong Shipbuilding at its yard in Tongyeong, South Gyeongsang Province, before being towed by three vessels over a 17-hour, 120 km sea journey to Ulsan, where it was joined to a 102 m stern section constructed in-house. Workers aligned the joints using large cranes, installed external steel plates, drained the dock and connected internal reinforcements. Piping and wiring work is scheduled to continue until mid-month, with delivery to the owner targeted for July. The logic behind the so-called ‘half-ship project; is dock space, pure and simple. By building only the stern section – the technically complex half housing the engine room – in its own facility, HD Hyundai frees up the remaining dock capacity to pre-assemble blocks for other vessels simultaneously, effectively shifting from building one ship per dock to overlapping work on two or more. The less technically demanding bow section, requiring significant manpower and space but lower engineering complexity, is outsourced to HSG Sungdong, which gains a valuable new revenue stream from the arrangement. After years of financial hardship that culminated in court receivership in 2018, the reborn HSG Sungdong — acquired by HSG Heavy Industries late in 2019 — had been operating mainly as a block builder. That changed last year with contracts for vessel construction coming from bigger nearby yards. Between 2004 and 2017, the then Sungdong Shipbuilding delivered over 250 vessels, including capesize bulkers and MR tankers. HD Hyundai formed a dedicated task force in March last year to redesign workflows for the project, a necessary step given that splitting a vessel between two facilities requires an entirely different construction sequence from conventional single-dock shipbuilding. The pressure driving such innovation is considerable. The combined orderbook of South Korea’s Big Three shipbuilders – HD Korea Shipbuilding & Offshore Engineering, Hanwha Ocean and Samsung Heavy Industries – has risen from $86.46bn in 2021 to $139.16bn by the end of last year, and yards are pursuing every available means of expanding effective capacity without building new docks, having been burnt by sudden overcapacity in previous boom and bust shipbuilding cycles. Each of the three is taking a different approach. Samsung Heavy, for instance, has opted for a full-ship construction model, outsourcing complete vessels to HSG Sungdong – currently four crude oil carriers – accepting lower margins in exchange for higher overall order volumes. Smaller yards are following the trend. HJ Shipbuilding & Construction outsourced the production of deckhouse residential blocks for eight containerships to Daesun Shipbuilding in February, freeing its own docks for aggressive pursu