On November 15, Korea’sMinistry of Trade, Industry and Energy(MOTIE) announced the “Next Generation Leadership Strategy for Korea’s Shipbuilding Industry” at the Ministerial Conference on Emergency Economy and the Working Conference on Export and Investment: by 2028, the Korean government will invest KRW 710 billion (approx. 3.948 billion yuan) centrally in the country’s shipbuilding industry to develop cutting-edge technologies and upgrade the manufacturing system.
At present, Korean shipbuilders have taken 60% of the world’s high value-added ship orders and 45% of the orders for environmentally friendly ships. Despite ample hand-held orders, the Korean shipbuilding industry is facing risks such as technological catch-up, competition, and environmental regulations. In this regard, the MOTIE in considering a large number of industry views formally launched the “Korean shipbuilding industry, a new generation of leading strategy”, aimed at further promoting the development of the shipbuilding industry, and through the enhancement of the competitiveness of the manufacturing industry to consolidate the position of the Korean shipbuilding industry.
On November 15, Korea’s MOTIE announced that by 2028 it will invest a total of KRW 710 billion in the shipbuilding industry. At the same time, three major strategic directions were announced. Three major strategic directions are: seizing future cutting-edge technologies; upgrading the shipbuilding industry’s manufacturing system; and improving the legal and institutional infrastructure.
Investing KRW 360 billion to capture future cutting-edge technologies
Plans to invest 40 billion won (about 222 million yuan) in three decarbonized core fuels, including liquefied natural gas (LNG), ammonia, and hydrogen, ensure a future ship technology portfolio that reduces carbon emissions.
It plans to invest KRW 40 billion (about RMB 222 million) in the ammonia carrier field, with the goal of achieving the world’s No. 1 market share in this field by 2030 and 100% localization of related equipment.
Plans call for an investment of KRW 120 billion (approximately RMB 667 million) to support the demonstration and commercialization of hydrogen-fueled ships, with the goal of securing the original technology for this type of ship and commercializing the world’s first medium-sized hydrogen-fueled ship by 2030.
Plans to invest KRW 160 billion (approx. Rs. 890 million) in securing world-leading technology in the field of autonomous ships.
Investment of KRW 350 billion to upgrade manufacturing system for shipbuilding industry
Plans to invest KRW 150 billion (about RMB 834 million) to achieve manufacturing innovation through digital transformation in areas such as ship design and production, and the popularization of robots, which will increase productivity by 30% and reduce the workforce by 30%.
Plans to invest KRW 200 billion (approx. Rs. 1.112 billion) to strengthen the export competitiveness of small and medium-sized shipyards and equipment industries. KITC will formulate and announce a plan to strengthen the competitiveness of small and medium-sized shipyards and shipbuilding equipment industries in the second half of 2024.
Improving legal and institutional infrastructure
The Korean government will negotiate with financial institutions to create conditions for the issuance of refundable down payment guarantees (RGs) for medium-sized shipbuilders and provide special guarantees worth KRW 200 billion (about RMB 1.112 billion) through the Korea Trade Insurance Corporation to make up for the shortfall in the RG limit.
To ensure a stable supply of foreign labor, Korea will estimate the number of foreign national laborers needed in each year and quarter for the next five years and, based on this, improve the visa system and the working environment for foreign laborers.
Support the establishment of a win-win infrastructure between labor and management, small, medium and large enterprises, and develop a new shipbuilding industry law and other systems.
At the beginning of 2024, the Korean government will form a ‘Future Shipbuilding Alliance’ with the participation of the three major shipbuilders, small and medium-sized shipbuilders, equipment manufacturers, as well as related associations and organizations, to respond to the future changes in the global shipbuilding market and to follow up on the implementation of the above nine measures in a timely manner.
Jang Young-jin, Minister of MOTIE, said, “The Korean shipbuilding industry is experiencing another takeoff as the global shipbuilding market is booming. We will fully support the shipbuilding industry to strengthen its competitiveness so that it can continue to maintain its leading position.”