South Korea’s shipbuilding industry maintains world-leading status in newbuild orders, but its ship MRO (maintenance, repair, and overhaul) sector remains critically underdeveloped, with 92.5% of large South Korean-flagged vessels being repaired overseas. At the “Forum on Building a Maritime MRO and Ship Repair Cluster for the MASGA Era” held at the National Assembly Library’s small auditorium on September 3, experts voiced a consensus that a ship repair cluster centered on Busan must be established to fill this gap.

The forum, co-hosted by the office of National Assembly member Song Ok-ju, Busan Metropolitan City, and Hanwha Ocean, with sponsorship from the Korea Shipowners’ Association, was organized to leverage changing external conditions — including the U.S.-South Korea shipbuilding cooperation (MASGA), the opening of the Arctic Route, and tightening maritime decarbonization regulations — as opportunities to expand South Korea’s domestic MRO industry.

In a written congratulatory address, Hanwha Ocean CEO Kim Hee-cheol stated, “Ship repair is evolving beyond a labor-intensive industry into a high-value-added sector combining AI, robotics, and data-driven diagnostic technologies.” He added, “With the government pursuing the Arctic Route as a national priority and the Ministry of Oceans and Fisheries having relocated to Busan, now is the opportune moment to discuss the competitiveness of the ship maintenance and repair industry.”

He further noted, “If investments in facilities and technologies to enhance maintenance capabilities are properly valued, and efforts to grow alongside local communities are recognized for their worth, companies will be able to invest from a longer-term perspective” — signaling Hanwha Ocean’s willingness to make long-term investments should the cluster become a reality.

Repair demand is growing, but domestic capacity falls short

According to data presented at the forum, tightening environmental regulations from the International Maritime Organization (IMO) are expected to rapidly increase demand for eco-friendly retrofits, including dual-fuel propulsion conversions and ballast water treatment system (BWTS) installations. Ahn Seung-hyun, associate research fellow at the Korea Maritime Institute, projected that the global ship conversion market will more than double within the next five years.

The activation of the Arctic Route was also cited as a factor that will drive demand for maintenance hubs serving polar-operating vessels, including icebreakers. Analysts also suggested that U.S.-South Korea shipbuilding cooperation could connect U.S. Navy vessel MRO demand to opportunities for expanding South Korea’s domestic infrastructure.

However, South Korea’s ship repair infrastructure lags far behind its newbuild sector. Since 2000, mid- and large-sized shipbuilders have concentrated on newbuild projects, drastically reducing repair dock capacity. As a result, South Korea has only one ultra-large repair dock capable of accommodating vessels of 30,000 tons or above. Consequently, between 2022 and 2024, 92.5% of South Korean-flagged vessels of 30,000 tons or larger were repaired overseas.

Kwon Hyo-jae, CEO of COR Energy Insight, pointed to potential technology leakage as a side effect of rising overseas repair dependence. “Even when South Korea builds ships with cutting-edge technology, scanning and other procedures during overseas MRO work can lead to the leakage of design and other proprietary technologies,” he said.

Government presents roadmap targeting 2030 groundbreaking

South Korea’s Ministry of Oceans and Fisheries announced plans to invest approximately 1.5 trillion won (approximately $1.1 billion) in the southern area of Busan New Port to build a ship repair complex capable of servicing icebreakers and large container ships of 30,000 tons or more. The plan calls for starting a business model study this year, followed by a private investment eligibility review in 2028, third-party proposal evaluation in 2029, and groundbreaking in 2030. The ministry issued a research service tender in July for securing the public-interest aspects of the Busan New Port ship repair complex.

Busan Mayor Jeon Jae-soo, in a written welcoming address, appealed for legislative and budgetary support for the cluster. Assembly member Song said, “A few days ago, I urged Oceans and Fisheries Minister Hwang Jong-woo to pay attention to the MRO cluster proposal, and the ruling party will also push forward with the necessary legislation.”

Experts at the forum proposed that the ship repair complex be approached as national strategic infrastructure rather than a purely profit-driven facility. They noted that large shipyards are currently at full capacity with newbuild work, while small and mid-sized shipyards lack the facility standards to expand MRO operations — underscoring the need for government support in upgrading and certifying existing repair yards.

Kim Dae-sik, senior vice president at Hanwha Ocean, proposed a pilot program linking the construction and post-delivery maintenance of the next-generation destroyer (KDDX). Drawing on Hanwha Ocean’s experience competing for Canada’s Canadian Patrol Submarine Project (CPSP), he emphasized that “in naval vessel exports, total life-cycle maintenance capability after delivery determines competitiveness in winning orders.”

Suggestions were also made to bundle MRO services with newbuild contracts from the outset. CEO Kwon explained, “If package contracts are signed that include repair options at the time of vessel sale, the burden of parts procurement can also be reduced.”

CEO Kim Hee-cheol, citing Singapore as an example, expressed optimism: “South Korea, which possesses world-class shipbuilding technology, will create tremendous synergy if it expands into the maintenance sector by integrating finance, engineering, and services.” He cautioned, however, that securing competitiveness in the MRO industry requires addressing prerequisites including timely parts procurement, dock and quay wall infrastructure, equipment supply chains, and the concentration of skilled technical personnel.