The South Korean government will set up a dedicated support body for its ailing shipping industry. The organisation, which is expected to begin operation in June 2018, will have a capital of KRW 5 trillion (US$4.5 billion).
The plan to establish the Korea Maritime Promotion Corporation (KMPC) was announced by the country’s Ministry of Oceans and Fisheries last week during a meeting of the ministers of economic affairs.
KMPC already has a paid-in capital of KRW3.1 trillion (US$2.79 billion), with 32.3% contributed by Korean Ships and Oceans, 17.7% from Korea Maritime Guarantee Insurance, and 50% from the South Korean government.
According to a report by BusinessKorea, KMPC will work on financial and industrial policy matters necessary to revive the South Korean shipping industry, which has suffered serious decline in the past few years, with the bankruptcy of Hanjin Shipping as one of the most notable events. KMPC will also assume existing maritime financial support programs and provide financial support services such as investment in and guarantee for vessels and terminals, purchases of secondhand vessels, and re-chartering.
The government also announced that it will issue a KRW100 billion (US$90 million) special guarantee for refund guarantees issued by the Korea Development Bank and the Industrial Bank of Korea for small- and medium-sized shipbuilders at risk of bankruptcy due to the worsening climate of the global market.
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