AsiaShipyards

South Korea to check profitability of all ship orders

The South Korean government has announced that the state-run financial institutions will commence profitability checks on shipbuilding orders and large overseas construction projects to prevent local companies from winning contracts that will lead to losses.

According to Choi Kyung-hwan, South Korea’s finance minister, shipyards will not get support from local financial institutions if they accept zero profit orders.

Choi said state financial institutions need to take on more responsibility in preventing companies from signing contracts.

“Money losing projects can put pressure on financial institutions and if lenders are seriously hurt, this can be a burden for the economy as a whole. There is a need to fundamentally tackle this problem,” he stressed.

Following the announcement, the Export-Import Bank of Korea, Korea Development Bank and Korea Trade Insurance Corporation have all said they will mandatorily coordinate with the government’s decision.

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Jason Jiang

Jason is one of the most prolific writers on the diverse China shipping & logistics industry and his access to the major maritime players with business in China has proved an invaluable source of exclusives. Having been working at Asia Shipping Media since inception, Jason is the chief correspondent of Splash and associate editor of Maritime CEO magazine. Previously he had written for a host of titles including Supply Chain Asia, Cargo Facts and Air Cargo Week.

Comments

  1. Very wise move to over compete to secure business/and later on rely on variations. This will ultimately prevent the so called cost blowdowns.

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