President Moon Jae-in speaks during the launch event of HMM's new container ship, HMM Hanul, at a port in Busan on Tuesday. (Cheong Wa Dae)
President Moon Jae-in on Tuesday pledged full support for the nation’s shipping industry to further bolster its competitiveness in the global market and to regain its leadership position by 2030.
“Our pride as a top shipper has been recovered,” the president said during the launch event of HMM’s new mega container ship, called HMM Hanul, at Busan’s new port.
“The Hanul is the final of the total 20 vessels that completes the strong recovery of the nation’s shipping industry.”
In the early 2010s, the nation’s shipping industry was hit hard by an endless price-cutting race with bigger rivals in the global market. Within that time, Hanjin Shipping, then the world’s seventh-largest shipper, went bankrupt in 2016 and HMM, formerly Hyundai Merchant Marine, turned to a long-term deficit starting in 2011.
In 2018, the Moon administration vowed to rebuild the ailing industry under a five year-plan and established the Korea Ocean Business Corp., a policy financial institution dedicated to maritime transport funds.
In order to secure price competitiveness, HMM decided to order 20 new large container ships to the country’s three shipbuilders – Hyundai Heavy Industries, Daewoo Shipbuilding & Maritime Engineering and Samsung Heavy Industries – with almost 6 trillion won ($5.3 billion) in state funds being poured in.
Largely due to the massive container ship portfolio, the firm could join The Alliance, one of the world’s three largest shipping alliances, in the following year.
As a result of the government-led efforts, the nation’s shipping revenue that once tumbled to 29 trillion won in 2016 bounced back to 36 trillion won last year. This year the government aims to elevate the figure to some 40 trillion won.
Shipping volume is also expected to more than double this year from 46,000 TEUs in 2016 to 105,000 TEUs this year.
HMM, buoyed by bullish shipping demands and high freight rates, has also returned to a profit after almost a decade last year, with its operating profit exceeding 1 trillion won in the first quarter this year.
“Now we are about to start a new bigger challenge. Along with securing more massive container ships, we will make a big leap through environment-friendly and digital experiments in the field,” Moon said.
“By 2030, we aim to become a global shipping leader by securing a cargo capacity of more than 1.5 million TEUs and elevating revenue to more than 70 trillion won.”
As part of the plans, Korea Ocean Business Corp. and three state-run financial institutions – Korea Development Bank, Export-Import Bank of Korea and Korea Asset Management Corp. – announced they would create a new $300 million fund to support low-emissions shipbuilding.
HMM also unveiled new ship order plans, including 12 13,000-TEU container ships, six each with Hyundai Heavy Industries and Daewoo Shipbuilding & Maritime Engineering, by 2024. The new ships will be deployed on lucrative routes such as to the US to lower costs overall.
The new investment plans are expected to generate new production worth 3.7 trillion won and more than 11,000 new jobs in the shipbuilding industry alone.
The Hanul, with a cargo capacity of 16,000 TEUs, departed from the Busan port to travel to China, Hong Kong, the Netherlands, Germany and Belgium, about 38,000 kilometers, before coming back home in October.
The president attended its launch event to celebrate the successful completion of the HMM project, following his attendance at the naming ceremony of the first vessel, HMM Algeciras, in April last year.