South Korea’s government intends to provide funding of KRW 6.5 trillion (USD 5.7 billion) to help the country’s shipping companies renew their fleets, Reuters reported.
The first step is the establishment of a state-backed ship financing company with an initial sum of KRW 1 trillion (USD 871.7 million) to improve the financial position of the country’s shipping firms.
With this move, the government plans to support the financially troubled shipbuilding and shipping industries, following Hanjin Shipping’s filing for receivership in August this year.
Newbuilding orders won by South Korea’s shipbuilders during the first three quarters of this year decreased by 87 percent compared to the same period in 2015, Reuters cited the country’s trade ministry.
The drop in orders was caused by a fall in domestic orders, compared with shipyards in Japan and China, according to Reuters.
During the first half of the year, the Big Three shipbuilders including Hyundai Heavy Industries (HHI), Samsung Heavy Industries (SHI) and Daewoo Shipbuilding & Marine Engineering (DSME) cut their joint workforce by some 5,000 workers amid the global oversupply and the lack of demand in the shipbuilding industry.
World Maritime News Staff