''They're at an ideal position now where their prices are not above the Japanese level,'' Mr. Bartholomew said of the South Korean builders, ''the expertise is on a par with Japan and Europe, and the delivery time and reliability in many areas is better.'' It has been a remarkable rise, given that South Korea did not even have a shipbuilding industry before Hyundai produced two tankers in June 1974. South Korean manufacturers last year produced ships totaling 12.4 million gross tons, up 39.7 percent from 2001, with a backlog of 27.5 million gross tons, up 36.7 percent from the year before. Those figures compared with 11.5 million gross tons by Japanese shipbuilders and a backlog of 24 million gross tons. European Union shipbuilders, as a group, were third, producing four million gross tons. China, a rising competitor, ranked fourth, at 1.6 million gross tons.