Ministry of SMEs Proposes Solutions to Resolve Four Major Social Insurance Arrears for Shipbuilding SMEs
Joint Proposal with Jeollanam-do, Ulsan City, and Dong-gu, Ulsan
[Asia Economy Honam Reporting Headquarters Reporter Seo Young-seo] Yeongam-gun, Jeollanam-do (Governor Jeon Dong-pyeong) announced on the 13th that it has decided to jointly propose the establishment of government policy funds targeting small and medium-sized enterprises (SMEs) in the shipbuilding industry, together with three local governments: Jeollanam-do, Ulsan Metropolitan City, and Dong-gu, Ulsan.
The main proposal includes the establishment of government policy funds worth 100 billion KRW to resolve arrears in the four major social insurances for SMEs engaged in the shipbuilding industry.
Yeongam-gun and Dong-gu, Ulsan are regions where large shipbuilders (Hyundai Samho Heavy Industries, Hyundai Heavy Industries, Hyundai Mipo Dockyard) are located, and have been experiencing difficulties such as regional economic contraction due to the prolonged slump in the shipbuilding industry.
The council of in-house partner companies of the five major large shipbuilders, including Hyundai Samho Heavy Industries, estimates that the arrears in the four major social insurances of related companies amount to approximately 90 billion KRW, and when including companies located in the Daebul National Industrial Complex, the total is expected to reach 100 billion KRW. Due to these arrears, companies are unable to obtain loans from financial institutions and are facing management difficulties.
Yeongam-gun was first designated as an employment crisis area in May 2018, and with the designation set to expire at the end of this year, the repayment of arrears in the four major social insurances is expected to place a huge burden on companies, posing a significant threat to the management stability of SMEs in the shipbuilding industry.
Accordingly, the four local governments, including Yeongam-gun, have jointly proposed the establishment of special management stabilization funds to resolve the arrears in the four major social insurances.
A Yeongam-gun official stated, “The shipbuilding market has been in a prolonged slump, and with the added impact of COVID-19, the management of the local shipbuilding industry is very difficult, so we decided to propose government-level measures,” adding, “If this proposal is accepted, not only Hyundai Samho Heavy Industries but also many companies located in the Daebul National Industrial Complex are expected to benefit.”
He also added, “Our county will continue to consider measures to alleviate the difficulties of local SMEs.”
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