South Korea to assist in 200 ship orders
Date: Friday, April 6, 2018
Source: American Shipper
South Korea will assist companies in placing orders for about 200 commercial vessels in the next three years to help its shipping and shipbuilding industry.
KBS World Radio reported that under a five-year program announced Thursday by Minister of Oceans and Fisheries Kim Young-choon, “the government plans to help local shipping companies through a ship purchase assistance program as part of efforts to lift the industry out of its slump.
“Under the plan, the government will help local shipping firms place orders for 200 ships by 2020, including 140 bulk carriers and 60 containerships, using investment and guarantees from the Korea Ocean Business Corp. that are set to be launched in July," KBS added.
Korea’s Yonhap News Agency quoted the minister as saying, "Following the bankruptcy of Hanjin Shipping, sales of South Korea's shipping industry were cut by over 10 trillion won, and the tonnage of the deep sea containers has been cut in half. We have prepared a set of comprehensive measures to support the shipping and shipbuilding industries grappling with a protracted slump, intense competition and environmental regulations."
The ship purchase plan is expected to raise Hyundai Merchant Marine's (HMM) shipping capacity to 1 million TEUs by 2020 and includes plans to build ultra large container vessels, Yonhap said.
The plan mirrors statements made last month by HMM executives.
HMM CEO C.K. Yoo told shareholders at the annual meeting that the company expected to be “equipped with eco-friendly, mega smart containerships in the near future,” which Yoo said will give HMM “great cost-competitiveness and strengthen its sales power.”
Meanwhile, speaking at the Port of Long Beach’s Pulse of the Ports Peak Season Forecast, Lawrence Burns, senior vice president of trades and services at Hyundai America Shipping Agency, Inc., said HMM had plans to reach fleet capacity of 1 million TEUs by 2020. According to BlueWater Reporting's Carrier Ranking tool, HMM has an operating fleet capacity of 363,158 TEUs.
Yonhap said the ministry plans to help South Korea’s ailing shipbuilders by placing an order for 40 vessels for the country’s military or other government agencies.
It also plans to seek a new owner for Daewoo Shipbuilding and Marine Engineering, one of the country’s big three shipbuilders (the other two being Hyundai Heavy Industries Co. and Samsung Heavy Industries Co.), and encourage mergers and acquisitions among smaller shipyards to make them more competitive.
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