Leading shipbuilding companies organized the ‘offshore plant valve development council’.
Shipbuilding companies in Korea will join forces with small companies to develop equipments and materials for offshore plants, including floating, production, storage and offloading (FPSO) facilities.
The Ministry of Trade, Industry and Energy (MOTIE, Minister: Yoon Sang-jick) said on September 13 that leading shipbuilding companies, 41 small and medium equipment and material companies and industrial complex corporation agreed to organize the ‘offshore plant valve development council (valve cluster)’. Leading shipbuilding companies include Hyundai Heavy Industries, Samsung Heavy Industries and DSME.
Having recently selected NK Co. as the leading operating company, the council held on the day its inaugural meeting attended by shipbuilding companies, such as Hyundai Heavy Industries, Samsung Heavy Industries and DSME, small and medium equipment companies including NK Co., and supporting organizations, such as Korea Industrial Complex Corporation (KICOX), Korea Marine Equipment Research institute (KOMERI) and Busan Development Institute.
Valves for offshore plants, such as FPSO facilities, are made of special materials as they are exposed to a variety of fluid substances, such as crude oil, gas, sand and sea water, and they are used in extreme environments. Since ordering organizations select supplying companies or demand for track records because such valves require high quality, reliability and safety, small and medium companies have been experiencing difficulty in entering the market.
And companies in Korea are importing over 80% of valves for offshore plants. And offshore plant builders in Korea are undergoing difficulty in constructing plants on schedule due to unstable supply of valves caused by increase in their demand.
An FPSO facility uses over 4,500 values in some 2,000 different types and their accumulated prices reach about 50 billion won (15 billion won ~88 billion won).
The total value of orders for offshore plants received by companies in Korea is increasing by 40.1% annually, from $4.1 billion in 2008 to $22.1 billion in 2012, calling for urgent stability in supply of core equipments and materials, such as valves.
The MOTIE said it organized the valve development council jointly with leading shipbuilding companies and some 40 small and medium valve manufacturers to stabilize supply of valves for offshore plants.
The council will seek varied ways of expanding foundation for supplying valves for offshore plants, establishing joint ventures with vendors in other countries and attracting investment.
The MOTIE said the council is meaningful in that it set up the foundation for ecosystemic relations between large companies and small and medium businesses to jointly develop equipments and materials for offshore plants. Particularly, the council is expected to contribute to easing difficulties in developing technologies, registering vendors and attracting investment.