Korea to inject funds for shipbuilding industry

The South Korean government has decided to inject 9.5 trillion won to large shipbuilding companies and mid-sized subsidiaries of shipyards to help them complete construction of vessels. The latest move stemmed from the worrisome trend of shipping companies failing to win orders coming into this year which led the government to extend financing 4.7 trillion won more than its initial plan of injecting 4.7 trillion won with the aim to provide insurance for cash settlement.

Such a decision was reached in 16th emergency economic meeting presided by President Lee on 30 April where government officials agreed to double the amount to be financed for ship constructions to 9.5 trillion won by increasing 2.8 trillion won from the Korea Export and Import Bank and 2 trillion won from the Korea Export Insurance Corporation.

Shipbuilding companies normally receive the total down payment of construction for five times and 20 percent each. However, ship owners have recently failed to make a timely payment due to severe economic conditions. The new plan is an addition to the government?s plan to strengthen competitiveness of shipbuilding companies by providing 4.7 trillion won to complete building ships under construction and purchasing 100 ships through a creation of 4 trillion won fund.