The Government of South Korea has revealed plans to establish a state-backed financing company, valued at KRW6.5 trillion ($5.7 billion), in order to support the country’s troubled shipping and shipbuilding sectors.

The financing will mainly be provided for the purchase of new vessels.

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Discussed during the 6th Ministerial Meeting on Industrial Restructuring, South Korean Deputy Prime Minister Yoo Il Ho said that the government will transform the shipbuilding industry into a "more competitive and profitable one."

"the government will transform the shipbuilding industry into a ‘more competitive and profitable one."

Yoo Il Ho said that the focus will be on the "three most important areas of vessels, shipments and workforce, to help the industry recover to the fifth strongest in the world."

The industrial restructuring in the shipbuilding and shipping sectors will seek to promote a cooperative partnership between shipping companies and shippers, through which vessels are jointly ordered for the deliveries, as well as develop ports to attract transhipments.

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The government will inject KRW1.7 trillion worth of emergency operation funds into local subcontractors by 2017, and offer KRW1 trillion worth of public projects for the next five years.

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The South Korean Ministry of Trade, Industry and Energy said exports in the shipbuilding industry had a reported 49.4% increase compared to the same month in the previous year, at $2.57 billion, from receiving the shipbuilding orders of 23 vessels.

The country’s biggest shipping line, Hanjin Shipping, has already filed for court receivership in August this year.

South Korea-Daewoo Shipbuilding & Marine Engineering, one of the biggest shipyards in the world, has also witnessed a significant decrease in orders.