Busan City Holds Meeting to Overcome Crisis of Local Medium-Sized Shipbuilders

10:30 AM on the 27th, Deputy Mayor for Economic Affairs Office, attended by HJ Heavy Industries, Daesun Shipbuilding, Gangnam, etc.

Industry representatives including local mid-sized shipbuilders and Busan Shipbuilding & Marine Equipment Cooperativ

On the 27th at 10:30 a.m., Busan City held a crisis management meeting for local medium-sized shipbuilders in the office of the Deputy Mayor for Economic Affairs at City Hall.

Busan City held a meeting with medium-sized shipbuilders at the office of Lee Seong-gwon, Deputy Mayor for Economic Affairs (3rd from the left).

This meeting was organized to overcome the industry's crisis together through communication with the shipbuilding industry, as difficulties such as labor shortages and financial liquidity crises due to rising expenses have intensified in some local shipyards.

Attending the meeting were Deputy Mayor for Economic Affairs Lee Seong-gwon, representatives from local medium-sized shipbuilders including HJ Heavy Industries, Daeseon Shipbuilding, Gangnam, and representatives from the Busan Shipbuilding and Marine Equipment Cooperative and related marine equipment industries.

Recently, the shipbuilding industry has rebounded in orders since 2021, accounting for 29% of global orders. The share of high value-added and eco-friendly ships has reached first place worldwide, with order backlogs at the highest level in 12 years, equivalent to four years of work, recording 38.8 million CGT (Compensated Gross Tonnage).

However, local medium-sized shipyards have experienced significant delays in shipbuilding due to a drastic reduction in production technology personnel in the shipbuilding sector caused by prolonged restructuring and the impact of COVID-19. Consequently, it has become difficult to secure delivery payments and installment funds, leading to ongoing financial shortages.

In particular, since the restructuring in 2021, labor costs and raw material prices have risen sharply over the past two years compared to when ship contracts were signed, exacerbating difficulties.

At the meeting, representatives of medium-sized shipyards requested measures such as expanding Refund Guarantee (RG) for advance payments, reducing guarantee insurance premiums, and addressing labor shortages by improving the housing environment and providing counseling for foreign workers in the shipbuilding industry to help them adapt to Korea.

The city plans to actively review the proposals from the meeting and devise measures to improve the quality of life for foreign workers. It will continue to consult with relevant organizations to find solutions regarding financial aspects such as expanding Refund Guarantee (RG) and securing shipbuilding personnel.

As a countermeasure to the sharp decline in shipbuilding personnel, the city has been implementing a local shipbuilding production workforce development project since 2023, which provides employment-linked training and supports new hires with subsidies after training completion.

Additionally, to expand the supply of foreign workers in the shipbuilding sector, Busan City, together with four other local governments in the Busan-Ulsan-Gyeongnam and Jeonnam-Jeonbuk regions, jointly proposed government-level measures.

Deputy Mayor for Economic Affairs Lee Seong-gwon stated, “We organized this meeting to directly hear the difficulties faced by the industry and to brainstorm support policies at the city level. The shipbuilding industry is a crucial sector directly linked to Busan’s future growth, with many workers involved and leading the local economy. Therefore, the city and the industry will continue to maintain a cooperative and symbiotic partnership to overcome the crisis in the local shipbuilding industry.”