Shipbuilding
The Population Factor
The potential for a robust African shipbuilding industry is largely a story of demographics and labor cost, as it is with many industries. Today, China and South Korea compete for the largest market share in the shipbuilding industry. For example, South Korea netted 40% of the global orders for ships in July 2024, surpassing China.[1] Yet, both countries face a shrinking workforce, while the African workforce is expanding rapidly as noted in the charts below.
[1] https://www.scmp.com/economy/global-economy/article/3273414/south-korea-tops-china-shipbuilding-orders-competition-heats
Chinas Population Pyramid Forecast 2030
In contrast to South Korea and China, the African workforce is expected to continue growing well into the future as noted in the population pyramid below.
South Korea Population Pyramid Forecast 2030
In contrast to South Korea and China, the African workforce is expected to continue growing well into the future as noted in the population pyramid below.
African Population Pyramid Forecast 2030
Labor Cost Factor
According to our informal surveys, the pay rate for a South Korean welder in the shipyards is about four hundred percent (4X) higher than the cost of a welder in East Africa. The advantages that China and Korea will continue to have include:
- The shipyards are already in place, therefore that fixed up front capital cost is already factored.
- The Korean and Chinese workforces are already trained to perform this work.
Conclusions
The global shortage of skilled labor, including welders, has reached Asia. Currently, Japan and South Korea are both among countries who are importing both skilled and unskilled labor to work in their factories and shipyards.
It will require upfront investment capital in plant, (shipyards) equipment and training for shipbuilders to realize the potential competitive advantages and gains from investing in African shipbuilding.
African Skills and Development is interested in forming or participating in a consortium to develop and expand shipbuilding capacity in Africa.
