South Korea will place orders for about 200 vessels in the next three years to help the ailing shipping and shipbuilding industry tide over weak global demand, reported Yonhap. Government draws up plans to build 140 bulkers and 60 boxships by 2020 as it seeks to boost domestic industry. This will include 20,000 twenty-foot equivalent units (TEU) mega vessels and eight 140,000 TEU ships. Korea’s Yonhap News Agency quoted Oceans Minister Kim Young-choon 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." According to Ministry of Oceans and Fisheries, it will set up a maritime industry promotion agency in July to support placing orders for new ships in the form of investment or guaranteeing the ship purchase program. The nation has also committed to developing eco-friendly and energy containers to be in line with the International Maritime Organizations sulphur cap – coming into enforcement on the 2020. LNG-powered ships are considered an eco-friendly option to meet strengthened international regulations, but high costs have posed challenges to private shippers. The shipbuilding industry, once regarded as the backbone of the country's economic growth and job creation, has been reeling from mounting losses caused by an industrywide slump and increased costs. The nation's Big 3 shipyards -- Daewoo Shipbuilding & Marine Engineering Co., Hyundai Heavy Industries Co. and Samsung Heavy Industries Co. -- have been forced to undergo sweeping self-rescue programs worth some 11 trillion won (US$10.3 billion) since 2016. Hyundai Merchant Marine Co., the nation's leading ocean-going shipping company, currently handles 330,000 TEU, the 14th-largest capacity in the world. The ship purchase plan is expected to raise Hyundai Merchant's shipping capacity to 1 million TEU by 2020, the ministry noted. The ministry 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.
South Korea to order 200 vessels by 2020
7 hours ago