The international online conference “Russia – South Korea: Outlook and Opportunities for Cooperation in the Field of Shipbuilding. Steps Towards Implementation of the ‘Nine Bridges’ Concept” took place on June 18.
The event was held by the operator of the NEVA International Exhibition and the Central Scientific Research Institute (CSRI) Kurs JSC with the support of the RF Ministry of Industry and Trade (Minpromtorg Russia), the Korea Marine Equipment Association (KOMEA) and the Korea Marine Equipment Research Institute (KOMERI).
Conference participants discussed the progress being made in implementation of the “Nine Bridges” project and charted a course for further cooperation. Experts invited to speak at the event included representatives from the South Korean Ministry of Trade, Industry and Energy, the Department for the Shipbuilding Industry and Marine Equipment and Department for the Countries of Asia, Africa and Latin America at the RF Ministry of Industry and Trade, the Korea Shipbuilding and Marine Technology Association, the RF Trade Mission in South Korea, KOMERI, CRSI Kurs, the Krylov State Research Centre and the maritime high-tech association MARINET. Promising products were presented by the United Shipbuilding Corporation (USC), Zvezda Shipbuilding Complex, Hyundai Heavy Industries, Daewoo Shipbuilding & Marine Engineering and Samsung Heavy Industries.
The “Nine Bridges” concept, laying out nine key areas for investment cooperation between Russia and South Korea, was adopted by the two sides in early 2019 and updated a year-and-a-half later. On October 27, 2020, during a meeting of the co-chairs of the Russian – South Korean Joint Commission on Economic and Scientific-Technical Cooperation, Deputy Chairman of the RF Government – RF Presidential Envoy to the Far Eastern Federal District, Yury Trutnev, and South Korean Deputy Prime Minister – Minister of Economy and Finance, Hong Nam-ki, signed a Joint Statement on the Plan for Implementation of the “Nine Bridges” Concept for Russian – South Korean Trade and Economic Cooperation, version 2.0.
The updated plan encompasses bilateral projects in such fields as: energy, railways and infrastructure, shipbuilding, ports and shipping, healthcare, agriculture and the fisheries, investments and innovations, as well as culture and tourism. Implementation of the “Nine Bridges” concept is being coordinated by the RF Ministry of Economic Development and South Korean Presidential Committee on Northern Economic Cooperation.
Shipbuilding Team Leader at the South Korean Ministry of Trade, Industry and Energy, Yoon Jin-Young noted that shipbuilding is making a significant contribution to the development of Russian – South Korean relations. “Not only did the pandemic fail to suspend our bilateral cooperation – it actually strengthened our resolve to continue working together,” he emphasized.
Deputy Chairman of the Korea Shipbuilding and Marine Technology Association, Lee Byung Cheol, affirmed that cooperation in the shipbuilding field has ramped up and expressed the hope that both countries would develop new areas for collaboration.
Deputy Director of the Department for the Shipbuilding Industry and Marine Equipment at the RF Ministry of Industry and Trade, Aleksey Isachkin, discussed the key areas of cooperation between the two countries in the field of commercial shipbuilding. In the lead-up to the conference, Minpromtorg Russia conducted a survey of the Russian shipbuilding community to gauge the scope of existing proposals on possible areas for cooperation with Korean companies, as well as projects that would be open to joint implementation. The survey findings were used to compile a wide-ranging list of such proposals, which was then forwarded to the Korean side. In the furtherance of their ongoing bilateral work, Aleksey Isachkin asked his Korean colleagues from the South Korean Ministry of Trade, Industry and Energy to conduct a similar survey of the country’s domestic companies to assess their level of interest in cooperating with Russian partners or in entering the Russian market, and in doing so – to identify specific joint projects that could be promising for future collaboration.
South Korea is an important trade partner for Russia. In the trade segment for ships, boats and floating structures, 2020 saw the posting of export and import gains over 2019 (in monetary terms) of USD 122 mln and USD 173 mln, respectively. “It’s absolutely clear that shipbuilding is an economic sector that boasts tremendous potential – not only for the restoration of trade turnover, but also for its further growth and the development of bilateral relations,” noted Aleksey Isachkin.
Above and beyond participation in orders for the construction of finished vessels, Russia and South Korea are also eying prospects for cooperation in the production of shipboard equipment – particularly in view of the priority economic-development areas highlighted by the two countries. Definite areas for further growth in bilateral trade are non-resource exports and deep industrial cooperation, which in turn open up broad horizons for cooperation in the shipbuilding field.
At present, implementation is already underway on a number of joint projects that could be acknowledged as compliant with the measures envisioned under the “Nine Bridges” project. First and foremost, what’s at issue is the South Korean side’s participation in projects involving the implementation of Zvezda Shipbuilding Complex’s production programme as a developer of designs for heavy-tonnage vessels, a supplier of marine equipment and a partner in the training of personnel.
In addition, opportunities are currently being hammered out for the attraction of South Korean companies to the Russian market for the purposes of implementing production-localization projects within the scope of Zvezda’s production programme and moving forward – for the creation of an industrial technopark for the manufacturing of shipboard equipment on the grounds of the Bolshoy Kamen Priority Social and Economic Development Area. Space has been allocated at the production facilities of the Amur Shipbuilding Plant for Korean manufacturers of shipboard equipment.
Within the scope of the “Nine Bridges” concept, key Russian and South Korean companies have already signed a number of bilateral agreements on cooperation at different levels. “We think that this represents tremendous groundwork for further cooperation,” said Aleksey Isachkin. “We have far-reaching, long-range plans. In the shipbuilding area, our countries have amassed a lot of positive experience, and we’re confident that harnessing our combined efforts will yield a synergistic effect. All of the preconditions are already in place. We’re open for cooperation with our South Korean colleagues and prepared to render all possible assistance in the development of mutually-beneficial relations between our two countries. We anticipate that today’s meeting will continue in the form of the cultivation of constructive bilateral dialogue and the implementation of specific business projects.”
Deputy Director of the Department for the Countries of Asia, Africa and Latin America at the RF Ministry of Industry and Trade, Vyacheslav Serdyukov, thinks that the full potential of possible Russian – South Korean cooperation remains untapped. He called for more intensive use of the preferences offered by the Bolshoy Kamen Priority Social and Economic Development Area and the establishment of new business ties between the business communities of Russia and South Korea.
RF Trade Representative in South Korea, Alexander Masaltsev, called South Korea one of Russia’s most important strategic partners in a number of areas. As of year-end 2020, the COVID-19 pandemic had resulted in a 19% decline in trade turnover between the two countries to USD 19.6 bln; that said, the first 4 months of 2021 saw a gain of 34.3% to USD 9 bln. Cooperation in the shipbuilding field is one of the most important and anticipated areas, while shipbuilding and the manufacture of marine equipment is one of the key targets of both countries.
South Korea boasts strong competencies – but Russia also has a lot to share. LNG-technologies, the design and production of robotic marine search-and-rescue systems and the development of systems and equipment for unmanned navigation – Alexander Masaltsev thinks that all of these areas could lead to the opening of new joint ventures. At South Korean production facilities, Russian orders are being placed for gas tankers, oil tankers, shuttle tankers and other types of vessels. At the Zvezda Shipbuilding Complex, Aframax-class ships are being built. For its part, the RF Trade Mission in South Korea expressed its readiness to provide maximum support to all related initiatives.
Zvezda Shipbuilding Complex’s Deputy General Director and Project Director, Konstantin Globenko, showcased the capabilities of one of Russia’s most cutting-edge shipyards. Zvezda boasts the country’s largest drydock, as well as unique crane equipment capable of handling up to 330K tons of steel a year and assembling vessels with a draft of up to 350K tons. The enterprise’s portfolio currently encompasses 66 ships, 18 of which are at the active building stage. Zvezda’s total order portfolio is valued at roughly RUB 680 bln, with a total contracted-vessel weight of 830K tons. The vessels currently under construction include Arctic tankers for the Arctic LNG 2 project, supply ships for Rosneft and Gazprom, icebreakers for Atomflot and Rosmorport and Arctic shuttle tankers with a deadweight of 69 and 120K tons. Some of these projects are being implemented in close partnership with Hyundai Heavy Industries and Samsung Heavy Industries, with whom the respective joint ventures have been created. Worthy of special mention are the Aframax-class tankers. The first of the group, the “Vladimir Monomakh,” was christened in May 2020.
A shipbuilding cluster is being created at Zvezda in which South Korean companies can participate. Priority is being given to localization projects. The Bolshoy Kamen Industrial Park currently in development is leasing out land plots as well as warehousing and production space.
Chief Engineer at Hyundai Heavy Industries, Min-gook Kim, gave an overview of the company’s most ambitious projects that showcase its know-how. He paid special attention to tackling the issue of decarbonisation. Hyundai Heavy Industries is actively developing equipment designed to reduce carbon dioxide emissions. Another interesting project is a ship’s “digital twin,” used to improve the monitoring and analysis of marine shipping efficiency.
The cutting-edge construction of Arctic vessels was discussed by DSME Chief Engineer, Soon-min Hyuk. The company’s great pride – gas tankers in the “Arc7” (Arctic) category for the “Yamal LNG 2” project. They’re capable of operating year-round in temperatures as low as -52 °С and of singlehandedly breaking ice up to 2.1 metres thick when moving aft. The company pays particular attention to environmental-protection issues and is pursuing projects aimed at the reduction of harmful emissions and lowering of fuel consumption. It’s also developing hybrid systems and is planning to utilise ammonia, hydrogen and hybrid types of fuel.
The Chairman of Samsung Heavy Industries, Jingwan Kim, focused on the importance of training specialists within the scope of the implementation of joint projects involving the construction of Arctic vessels.
Advisor to the President of the United Shipbuilding Corporation – President of the Krylov State Research Centre, Vladimir Nikitin, noted that Russian – South Korean relations are of the utmost importance to USC. Significant results have already been achieved within the scope of joint programmes. At present, USC is focusing heavily on large-block construction, making the experience of the corporation’s South Korean colleagues all the more important. Development is in progress on a joint project involving the implementation of a concept for shipbuilding according to the distributed shipyard principle. It allows for the construction of large marine facilities through the efforts of several companies at once by taking a modular approach that makes it possible to deploy the necessary production capacities, cut construction time and evenly distribute the workload across multiple yards. USC is also concentrating on the introduction of lifecycle contracts and formation of a shipbuilding cluster in Russia, and moving forward – on the organisation of joint ventures, contractual production and cooperation in the manufacturing of shipboard equipment that meets applicable environmental standards. USC intends to continue its cooperation with the South Korean side in the design of ice-class vessels, the creation of floating power-generating units and the performance of emergency-rescue operations in the Arctic, etc.
The KOMERI expert noted the urgency of the production of high-tech remote-control marine equipment and cutting-edge monitoring systems.
For his part, General Director of the maritime high-tech association MARINET, Alexander Pinsky, presented Russian autonomous-navigation technologies. It’s a revolutionary challenge. Russia is the first country in the world to launch the broad application of autonomous commercial ships, thereby opening up vast opportunities for cooperating with its South Korean colleagues and joining forces to make these emerging technologies a worldwide reality.
In 2019, a number of shipping and technological companies – with the support of the RF Ministry of Industry and Trade and RF Ministry of Transport – started an autonomous navigation project with the strategic goal of making practical application of the technologies possible as of 2021. MARINET has managed to address a number of challenges: ensuring the transparency and predictability of autonomous-vessel operations, making the technologies affordable and cost-effective, and introducing new approaches within the existing international regulatory framework. According to specialists, vessels operating in autonomous and remote-control mode must be able to perform the full scope of functions that manned vessels do.
The RF Federal Agency for Maritime and River Transport has published the world’s first recommendations on international rules governing the prevention of ship collisions. At the level of national legislation, legal norms have been developed that allow shipping companies to operate autonomous vessels under the Russian flag. Pursuant to the respective RF Governmental Resolution, an experiment of national importance is slated to begin as of 2021.
One of the critical elements of the new technology is an optical system on par with human vision. Dozens of cameras provide constant 360-degree close- and long-range observation, identify objects and relay the corresponding information to the autonomous navigation system – as well as to the remote-control console that lets the operator see the situation in a range of different modes. The autonomous navigation system identifies hazardous objects and plots diversionary maneuvers for safe navigation according to applicable international legislation. The remote-control console makes it possible to maintain observation of the vessel, and where necessary – for the operator to assume control.
The pilot project began in 2019. In September 2020 – testing commenced, in December – the system was approved by the Maritime Register of Shipping, and since February 2021 – real-world tests have been underway in commercial-operation mode. Periodically, the captain switches on autonomous-navigation mode. The symbiosis of operating modes is premised on the idea that on the open seas, in typical situations – automatic mode can be used, in unusual situations – remote control can be engaged, and in instances of legal or other restrictions – manual control can be assumed by the shipboard crew (pilotage, etc.). As noted by Alexander Pinsky, near-term plans call for the conclusion of experimental operation and running of demonstration voyages, while October is expected to see the adoption of the remaining necessary laws, clearing the way to proceed with the national experiment. A number of agreements on the equipping of over 20 vessels are already in place. Upon the completion of testing and signing of the aforementioned federal laws, these ships will be able to gain autonomous-class status and start working.
MARINET is proposing joining forces and implementing a similar pilot project in South Korea that takes advantage of the Russian experience. Already in 2022-23, it will be possible to create the conditions for the broad-based use of autonomous vessels in South Korea. Russia is interested in seeing autonomous-navigation technologies being introduced not just in Russia, but worldwide.
The Head of the Centre for the Import-Substitution and Localization of Shipboard Equipment at CSRI Kurs JSC, Dmitry Stoyanov, discussed the localization rules currently being drafted in Russia. In April 2021, RF Governmental Resolution No. 719 was amended to include a point-based system governing the production of industrial goods in Russia. The system envisions the grouping of 75 types of vessels, 10 technological operations, 110 types of general ship equipment, 16 marine systems and 126 types of special equipment. Each item is assigned a certain number of points ranging from 5 to 500, depending on its relative weight in the corresponding vessel’s total cost. The maximum number of points that can be assigned is roughly 7,500. In the transition period through 2023, the level of localization must be approximately 40% (2,300 points); it will only grow moving forward, insofar as Russia has a vested interest in the localization of shipbuilding within its own territory. Direct supplies of finished vessels from abroad are slated to decrease. The Marine Equipment Localization Centre at CSRI Kurs is ready to provide extensive support for the entry of South Korean companies onto the Russian market. Localization formats may vary – from the construction of a company’s own plants to the selection of technological partners from among Russian companies.
Department Head at the Krylov State Research Centre, Andrey Zaitsev, sees the “Nine Bridges” project as lending new impetus to the creation of competitive products. He focused his attention on developing the transit potential offered by the Northern Sea Route. The projected growth in cargo shipping along the Northern Sea Route is elevating the importance of issues related to boosting the economic efficiency of shipments, improving the ice performance of vessels, enhancing the safety of marine navigation, reducing harmful emissions and transitioning to environmentally-friendly types of fuel.
Director of the International Cooperation Department at the St. Petersburg State Marine Technical University, Kirill Rozhdestvensky, shared the department’s experience in the training and exchange of highly-skilled workers in the shipbuilding field and invited his Russian and South Korean colleagues to the
PAAMES / AMEC conference, scheduled to take place on September 22-23 within the framework of the NEVA International Exhibition.
Summing up the conference results, Kirill Rozhdestvensky – who had served as moderator – gave high marks to the discussion. It was an exceedingly interesting dialogue that advanced the strengthening of business ties and the charting of a course towards the expansion of further cooperation between Russia and South Korea in the field of commercial shipbuilding.
The event was part of the programme of international marine online conferences held from November 2020 through June 2021 by NEVA-International Ltd., organiser of the NEVA Exhibition & Conference, in cooperation with industry alliances and associations with the support of Minpromtorg Russia and the RF Ministry of Foreign Affairs. A video recording of the conference and related materials can be found here.