The South Korean government, according to the Wall Street Journal, is going to give Hyundai Merchant Marine (HMM) USD $5 billion to finance its order for 20 LNG powered mega-ships, which it made on September 28.
The funding was partly arranged by the Korea Ocean Business Corp, a government-owned business established in July to support the country’s shipping sector, in particular, its shipbuilders.
The mega-ship order was made to struggling shipbuilders Daewoo Shipbuilding and Marine Engineering Co., Samsung Heavy Industries Co. and Hyundai Heavy Industries.
In a statement, ECSA Secretary General Martin Dorsman said: “The South Korean reform plan is greatly concerning for the European shipowners and shipbuilding industry.
“These measures create an uneven playing field, hamper the free and equal access to international maritime transport and contribute to the global overcapacity.
“Part of this plan is also the support to secure stable cargoes for Korean flagged vessels, which is a flag reservation measure of a, particularly protectionist character.
“At a time that protectionist trends are rising, we ask Europe to send a strong message in support of free, fair and rules-based trade.”
SEA Europe Secretary General Christophe Tytgat, also commented: “The latest support measures from South Korea are clearly an example of unfair competitive distortions.
“By creating artificial demands through state aid, South Korea has regrettably contributed to today’s severe overcapacity in merchant shipbuilding and merchant shipping, with dramatic, far-reaching consequences for all market players, first for European shipbuilding and now also for European shipowners and the entire maritime value chain.
“Europe now needs to be vigilant that the same unfair trade practices with the same potential devastating effects are not repeated in other shipbuilding and shipping segments”.
Source: Port technology