Moon pledges help for industries

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Moon pledges help for industries


President Moon Jae-in delivers a speech after the christening of the world’s largest container ship built by Daewoo Shipbuilding & Marine Engineering Thursday at the Okpo shipyard in South Gyeongsang. The Algeciras is a 23,964 twenty-foot equivalent unit container ship. [YONHAP]

President Moon Jae-in emphasized his administration’s efforts to help industry weather the coronavirus crisis as he christened the world’s largest container ship.

Moon was at the Okpo shipyard in South Gyeongsang of Daewoo Shipbuilding & Marine Engineering Thursday to christen the 23,964 twenty-foot equivalent unit (TEU) container ship, Hyundai Merchant Marine’s (HMM) Algeciras.

“Today, the HMM Algeciras will be heading toward the ocean after its christening,” Moon said.

He said the shipping industry faced huge difficulties with the bankruptcy of Hanjin Shipping in 2017.

“[However], we have finally overcome them, and we are shooting the flare of Korea’s shipping industry’s re-emergence into the world with today’s christening of the Algeciras.”

He said Korea is launching 12 of the world’s largest container ships this year.

“Today we have to overcome another crisis,” Moon said. “We have to overcome the wave of economic stagnation caused by Covid-19.”

Previously, the world largest container ship was the MSC Mia, built by Samsung Heavy Industries, which is 23,756 TEU.

Moon raised concerns over the global shutdown, which is leading to a sharp decline in global cargo.

“The IMF has forecast the worst global recession since the Great Depression,” Moon said. “The government will swiftly inject emergency funds into shipping companies that have been affected by Covid-19 while suspending loans and cutting port charges, which would amount to 380 billion won [$309 million],” he added.

“The Algeciras is another miracle of our shipping industry and our economy,” Moon said.

The christening came hours after the government announced follow-up measures to support key industries, which was promised during an emergency economic council meeting on Wednesday.

The shipping industry was included along with the automobile, airline, refiner and shipbuilding industries.

For the automobile industry, the government said it has decided to accelerate its purchase of 8,700 vehicles.

The government has also decided to suspend customs tariffs and value-added taxes for imports of automotive parts for up to 12 months.

Additionally, it will not levy penalties on unpaid customs tariffs and value-added taxes until September.

Automakers will be able to stockpile inventories of imported parts at airports and ports for up to a year, up from the current two to three months.

The government has decided to extend an exemption on charges to airlines for the use of airport facilities that was supposed to end next month.

The government has extended the airlines’ free use of airports until August.

The government said it will be looking into temporarily lowering taxes on airplane ownership and even suspending payments.

Additionally, 300 billion won in financial support for budget airlines will be expanded if needed.

For shipping companies, the government will be helping with liquidity by buying up to 100 billion won in corporate bonds through the state-owned Korea Ocean Business Corporation.

The Korea Ocean Business Corporation will also offer financing of up to 100 billion won for mergers and acquisitions by local shipping companies.

For shipbuilders, the government has decided to extend subsidies to pay workers for six months. The subsidy program was supposed to end in June.

For refiners, which have been hit by nosediving international crude prices, the government has decided to postpone taxes that the companies would have to pay at the end of this month until the end of July. Additionally the payment of customs and value-added taxes on importing crude oil will be delayed for two months.

“Automobiles, airlines, shipping, refineries and shipbuilding are key pillars of the Korean economy,” Finance Minister Hong Nam-ki said during the government crisis management meeting. “These five industries account for roughly 20 percent of the country’s GDP and 30 percent of exports. There are [as of 2018] 600,000 people working in these industries.

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