Support for ship manufacture financing is urgent to help the shipbuilding industry escape from the slump

Recommendation to expand support for ship manufacture financing to strengthen competitiveness of the shipbuilding industry 

Asserting that the expansion of support for ship manufacture financing and the improvement of credit management system are urgent to help the shipbuilding industry escape from the slump, FKI recommended that the government expand financial assistance to strengthen competitiveness of the shipbuilding industry.

Except a few large-size shipbuilders, most domestic shipbuilders are suffering from a long-lasting slump with some of them placed under the creditors' management.

FKI asserted that actual expansion of support for ship manufacture financing is needed to help those shipbuilders tide over the crisis. As a concrete step, it said that credit appraisals suitable for characteristics of the shipbuilding industry are necessary.

It said that creative credit appraisals placing focus on risks by project, including ship manufacturing ability and credit status of those issuing ship orders, should be made, rather than simple appraisals on credit risk of relevant companies.

In other words, support for ship manufacture financing should be extended to those who can recover competitiveness if they solve temporary financial difficulty.

For an instance, credit appraisal paradigm should be changed in such a way as to extend financial support to those who cannot get the assistance owing to corporate risk-oriented inflexible credit appraisal, even though a company placing an order is a big global company.

Besides, FKI suggested expansion of the volume of manufacture financing, activation of industrial financing by institution and early establishment of a ship financing corporation as ways to help shipbuilders come out of the slump.