[Courtesy of Hyundai Merchant Marine]
SEOUL -- South Korea's creditor-controlled shipping company, Hyundai Merchant Marine, started sending out orders for 20 giant container ships Tuesday as part of a government scheme to rehabilitate domestic shipbuilders which have been put under painful restructuring to reduce their debt.
The shipper said its request for proposal for very large container ships would be sent to three top shipyards -- Hyundai Heavy Industries, Daewoo Shipbuilding & Marine Engineering and Samsung Heavy Industries. The total value of orders is estimated at three trillion won (2.83 billion US dollars).
Under a government-sponsored program to help domestic shipyards, South Korean shipping companies will place orders for 200 ships worth eight trillion won for five years. Hyundai Merchant will acquire 20 giant eco-friendly container ships by 2020 when new rules imposed by a U.N. maritime safety agency on the amount of sulfur take effect.
South Korean shippers have been in trouble due to falling freight rates stemming from an oversupply of ships and a protracted slump in the global economy. In February last year, Hanjin Shipping which used to be South Korea's top container carrier terminated its 40-year-long business.
Kim Young-moo, vice chairman of the Korea Shipowners Association (KSA), said Hanjin's liquidation was a big policy mistake made by the government of ex-president Park Geun-hye because it weakened the competitiveness of South Korean shippers and helped foreign rivals increase their clout. Hyundai Merchant has absorbed some of Hanjin's assets to lead the domestic shipping industry.
reporter
Lim Chang-won
cwlim34@ajunews.com
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