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November 10, 2009
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| The Korean government plans to restructure insolvent shipbuilders while offering them greater financial support in an effort to revive the industry, which has been suffering the effects of the global slowdown since last year. The Ministry of Knowledge Economy said yesterday that the nation’s shipbuilding industry has shrunk to the degree that China has taken over the top spot in the global market. “New orders for Korean shipbuilders have in effect been suspended since late last year,” said Cho Seok, deputy minister for new growth industries. “We will help diversify the local shipbuilding industry with the addition of green growth and renewable energy businesses.” Cho said the government will increase support for the development of technology related to offshore plants, massive containers and LNG vessels. In the first nine months of the year, Korean shipbuilders received less than 10 percent of the orders they received in 2008, the deputy minister said. Last year, Korean shipbuilders received 655 new orders in the first nine months of the year. This year only 47 new orders were made in that period. Meanwhile, Chinese shipbuilders received an increasing number of orders to take the top spot in the global shipbuilding market, replacing Korea for the first time. The government predicts Korea will be unlikely to recover quickly enough to make up for the number of orders that have been made in the past five years. Creditors put 24 small and midsize shipbuilders through a credit risk evaluation process in January, March and June of this year. As a result, eight companies are undergoing corporate restructuring schemes. Under the government plan, struggling small and midsize shipbuilders will be converted to related businesses such as repairs and marine leisure equipment businesses. Meanwhile the Export-Import Bank of Korea is planning to provide 500 billion won ($431.7 million) in loans to the shipbuilding industry to help develop new vessels. By Lee Ho-jeong [ojlee82@joongang.co.kr] |
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