Korean Government to Assist in Steel Sector Restructuring from August

The South Korean government is planning to assist in the restructuring of South Korean steelmakers by means of the Corporate Vitality Improvement Special Act from August this year. Minister of Trade, Industry & Energy Joo Hyung-hwan made this announcement on June 9 at the commemoration ceremony for the 17th anniversary of the Day of Steel that took place at the POSCO Center located in Seoul. 

The act is to eliminate unnecessary regulations in various acts such as the commercial law, tax law and Fair Trade Act and provide tax and financial incentives. It is also known by the name of One Shot Act. 

“The Corporate Vitality Improvement Special Act is scheduled to become effective in August this year,” the minister said, adding, “According to the act, a variety of procedures stipulated in the commercial law and the Fair Trade Act are to be simplified, uncertainties resulting from regulations are to be eliminated with regard to businesses in new industries and postponement of taxation will be provided along with financial incentives for the minimization of liquidity pressures so that companies in the domestic steel industry can accelerate their voluntary business restructuring and reorganization.”

Earlier, the Korea Steel Association requested the Boston Consulting Group to draw up a report on the supply glut situation in the industry in order to fathom a required level of the restructuring of the sector. Results of the analysis are likely to be made available next month. Then, South Korean steelmakers are going to make decisions on whether to adopt the act or not.