Seoul has moved to ease the burden on hard-hit subcontractors working at the nation’s struggling shipyards. The government is looking to give tax cuts and waive mandatory insurance fees to subcontractors to help ease the pain as they get hit hard from the restructuring at yards in South Korea.
South Korea’s Financial Service Commission has also said it will provide loans to shipyards to ensure they can complete their orderbooks amid the greatest shipbuilding crisis to hit the local yards scene in a generation.
All of the nation’s largest yards have entered restructuring while a number of smaller yards have shuttered in the past 18 months.
The situation is mirrored in other yards across the world. A recent report from Danish Ship Finance (DSF) suggested some 200 yards around the world would close this year, leaving some 530 yards building ocean going ships by the end of 2016.
DSF predicts that some 45% of order backlogs at present are expected to be delivered within this year and shipyards will receive nearly no new orders in the coming 18 months.