Choo Kyung-ho "Securing Super-Gap in Shipbuilding... Expanding RG Special Guarantee to 400 Billion Won"

Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho stated on the 4th at the Geoje shipbuilding export site, "We will expand the issuance of Refund Guarantee (RG) to enable our shipbuilding industry to secure a global super-gap."

On the afternoon of the same day, Deputy Prime Minister Choo visited Hanwha Ocean in Geoje and held a meeting with industry officials, saying, "We will fully support finance, workforce development, and R&D sectors, including establishing a talent development center to nurture future shipbuilding talents and expanding budgets for eco-friendly and digital research and development (R&D)"

Recently, the shipbuilding industry has been leading the global export market by securing one-third of the world's ship orders. In particular, the market share of high value-added and eco-friendly ship orders ranks first in the world.

[Image source=Yonhap News]

Deputy Prime Minister Choo evaluated, "Shipbuilding exports in the first half of the year increased by 11.9% compared to the previous year, and the order backlog reached the highest level in 12 years, raising expectations for a 'second golden age of shipbuilding.'"

He added, "We will promptly issue RGs for Hanwha Ocean’s upcoming orders in the second half of this year, including Qatar and LPG (liquefied petroleum gas) ships, and for RGs exceeding the issuance limit, we will ensure smooth supply by sharing the burden between policy financial institutions and commercial banks."

He emphasized, "Regarding the RG issuance amount by financial institutions, the Korea Trade Insurance Corporation will significantly expand the re-guarantee fund, which covers about 85%, from 120 billion won to 400 billion won for the first time since 2019." RG refers to the bank's refund guarantee on advance payments, which are usually about 40% of the ship price, paid in advance by the ordering party to the shipbuilder to prepare for situations where ship delivery becomes impossible.

Furthermore, support to resolve labor shortages and nurture future talents will be strengthened. Deputy Prime Minister Choo said, "We will consider expanding the separate quota of 5,000 overseas simple labor workers (E-9) for shipbuilding, taking into account the fulfillment rate," and emphasized, "We will expand the Hope Deduction project, which was limited to new entrants, to current employees to support long-term service."

Additionally, a Shipbuilding and Marine Future Innovation Talent Development Center will be established to educate eco-friendly and smart ship technologies, nurturing 750 future talents annually and strengthening industrial competitiveness in the mid to long term.

Regarding R&D support, Deputy Prime Minister Choo explained, "We will increase support for eco-friendly ship full-cycle innovative technology R&D for zero-carbon and low-carbon ship development from 11.3 billion won this year to 15.9 billion won next year, and for autonomous ship technology from 10.1 billion won this year to 10.5 billion won next year," adding, "Support projects for digitalization of the shipbuilding and marine industry, such as smart design and smart yards (automated factories), will also be expanded from 5.7 billion won this year to 12.2 billion won next year."

Deputy Prime Minister Choo said, "We plan to announce a shipbuilding industry competitiveness enhancement plan (tentative name) within the year to secure a super-gap in the shipbuilding industry, and we will actively reflect the difficulties heard on site today."