Gov’t Announces Measures to Enhance Competitiveness of Local Shipbuilders

Anchor: The government will place orders for at least 250 ships by 2020 at the cost of around eleven trillion won as part of efforts to prop up the country's sagging shipbuilding industry hit hard by slowing global demand. Finance Minister Yoo Il-ho unveiled a slew of related measures to help revive the sector on Monday at the Seoul Government Complex.

Mina Cha has more.

Report: The government said on Monday that it will place orders for 250 ships or more by 2020 worth eleven trillion won in total, or nine-point-six billion U.S. dollars, as part of efforts to help local shipbuilders deal with sagging global demand that is expected to continue for years to come.

To that end, the government said it will move up the plan to place shipbuilding orders that were previously scheduled to be executed later than the target year with the use of state funds.

While announcing a package of measures at the Government Complex in Seoul, Finance Minister Yoo Il-ho said it is expected that the global shipbuilding industry will continue to see a slump and unlikely recover by 2020 to the average amount of orders received between 2011 and 2015.

To respond to the long-term slump of the sector, the government said it will streamline the country's existing shipbuilding industry in a way that maximizes its global competitiveness and profitability. Simultaneously, the government said it will also try to transform the country's 'shipbuilding industry' into a comprehensive 'ship industry' by helping local shipbuilders cultivate high-valued ship-related services.

Yoo said Daewoo Shipbuilding and Marine Engineering(DSME), which is currently under the management of its creditors, will be led to enhance its efficiency in management in the short-term and to find a new owner in the long-term.

Regarding efforts to raise the competitiveness of local shipbuilders, Yoo said the government will help them build more environment-friendly and smart ships, while assisting in the fostering of new services markets, such as repairing, retooling and plant designing.

To ease the financial difficulties faced by regions where shipbuilding clusters are located, the government plans to inject a one-point-seven trillion won emergency fund by next year to stabilize business conditions.

The government will also spend around one trillion won over the course of five years for the creation of jobs in the sector.

Yoo said the government has devoted itself to the reform and restructuring of the shipbuilding industry with an acute awareness that without such efforts, the industry will falter behind its global rivals. Yoo emphasized that the restructuring has been carried out in a manner under which companies hold primary responsibility for their losses, adding the government will hold onto that principle.

Mina Cha has more.

Source: KBS World Radio