Eximbank to Prop up Shipping Industry
The Export and Import Bank of Korea (Eximbank) announced on April 20 that it will provide more than 800 billion won this year to help the maritime shipping industry.
At a meeting with the CEOs of major shipping firms at the Korea Federation of Banks building in Myeong-dong, downtown Seoul, Chairman Eun Seong-soo unveiled the bank’s funding plan for this year, which is large enough to finance the construction of 30 regular-size cargo ships.
Eximbank held the “Get-Together for CEOs of Shipping Firms,” to learn about the problems facing the shipping industry from the heads of 10 major shipping firms and key executives of the Korea Ship Owners Association at the gathering.
The shipping firms they represented included the Hyundai Merchant Marine, Jangkeum Merchant Marine, Koryo Maritime Shipping, Polaris Shipping, SK Shipping, Dongah Tanker and KSS Shipping, among others. The meeting took place on the heels of the government announcement of its plan to help the shipping industry following the debacle of the Hanjin Shipping, the largest maritime shipping firm in Korea, which went belly-up. The government had to step in to get the shipping firm keep operating.
The government’s 5-Year Plan to Rebuild the Shipping Industry involves its support to build 200 ocean-going ships, which will be managed by the Korea Maritime Promotion Corp. to be launched in July.
The Eximbank CEO said at the meeting that the shipping industry and ship yards have been hit by tough times, boosting shipping expenses for export goods from Korea.
He said Eximbank will provide its financial support evenly to both the shipping and shipbuilding firms.
The five-year restructuring plan will strengthen the competitiveness of shipping companies, and when this leads to a positive cycle of creating demand for shipbuilders, such cost will be reduced.
As part of its determination to revive its ailing shipping industry, South Korea has revealed an ambitious investment plan that will see the construction of about 200 ships in the next three years.
These will include up to 140 bulkers and 60 containerships, including 20 ULCVs.
Under the plan, revealed by the Ministry of Ocean and Fisheries earlier in the year, the country aims to create a symbiotic system that would renew the country’s fleet with efficient eco-friendly vessels, boosting at the same time local shipbuilders with orders and securing cargo influx at local seaports by offering competitive services.
The rehabilitation plan is being pursued in the wake of Hanjin Shipping’s bankruptcy, which cut South Korea’s shipping industry’s sales by over 10 trillion won, halving the country’s tonnage of the deep sea containers. One of the key features of the plan is to provide financing, especially for smaller shipping companies which have so far had limited access to funding for ship investments.
To that end, the Korea Maritime Promotion Corporation, a maritime powerhouse intended to support the country’s maritime branches, will have its newbuilding investment support program adapted to benefit small and medium-sized companies.
The promotion agency is set to launch this July and will provide money or investment guarantees for companies’ ship investments.
The Export-Import Bank of Korea (Korea Eximbank) recently promised 800 billion won in loans and guarantees to the local shipping industry this year as the government acts on a five-year restructuring plan.
Source: News World