Korea Ocean Business Corporation will be launched on July 5 to support Korea’s ailing shipping industry. It is established to follow through on President Moon Jae-in’s campaign pledge to revitalize the shipping industry, which was on the verge of breakdown following the bankruptcy of Hanjin Shipping.
The Ministry of Maritime Affairs and Fisheries officially appointed Hwang Ho-sun, a former professor of Pukyong University, as the first president of the state-funded organization.
Korea Ocean Business Corporation is an institute dedicated to supporting the shipping industry. Its roles include investing in new ships or providing payment guarantees for shipbuilding orders; purchasing used vessels and re-chartering them; providing market information to shippers to support their transactions; stabilizing shipping companies by helping them replace old vessels; and implementing essential national shipping system to support shipping in emergency cases.
Korea Shipping and Maritime Transportation and Korea Marine Guarantee Insurance have been integrated into the corporation.
The establishment of Korea Ocean Business Corporation will speed up the ordering of new vessels and financial support for ship construction.
The corporation plans to provide support the construction of 200 new vessels for domestic shipping companies over the next three years. The government will make an equity investment amounting to 30% of the construction cost for 40 vessels and provide payment guarantees up to a certain amount for the remaining 160.
The Ministry of Maritime Affairs and Fisheries has recently surveyed demand for shipbuilding support and 18 shipping companies applied for support for 36 vessels. By type of ships, it included four container ships, 17 bulk carriers, 10 tankers, and five others.
Hyundai Merchant Marine was excluded from the supported companies as it has already ordered 20 large container ships worth 3 trillion won through a new shipbuilding support program.
The government plans to launch shipbuilding funds to channel funds from domestic and overseas investors into the construction of new vessels. The ministry said several foreign investors expressed interest in investing in these funds.
Korea Ocean Business Corporation is a public institution with a legal capital of 5 trillion won. It is responsible for financial support for shipping companies, marine transaction, business improvement, and mutual support among industries.
With Korea Ocean Business Corporation announcing its launch, the government is trying to rally support for reconstructing the shipping industry. Kim Young-chun, minister of maritime affairs and fisheries, said, "We will support individual companies in the entire shipping industry through the corporation. If integration is needed, we will carry out integraion and if necessary, we will support restructuring. "
The maritime industry, which has been in trouble for years, welcomes the launch of the corporation. After Hanjin Shipping's application for court management, the nation's major national fleet shipments dropped by 62% from 1.05 million TEU (Hanjin Shipping and Hyundai Merchant Marine) to 0.39 million TEU (Hyundai Merchant Marine and SM) in August last year.