South Korean ship exports expected to rise 26% this year

South Korean ship exports are expected to rise 26 per cent in 2009 despite the worldwide economic slump and falling prices, the government said Friday. The Ministry of Knowledge Economy said executives from Hyundai Heavy Industries Co., Samsung Heavy Industries, Daewoo Shipbuilding and Marine Engineering Co. and the Korea Shipbuilders' Association (KOSHIPA) expect total exports to reach US$54.4 billion. In 2008, total exports reached US$43.2 billion, making the country the world's top shipbuilder.
Exports will likely continue to do well for two to three years since many leading yards have long, backlogged orders, they said.
Local companies, meanwhile, cited difficulties related to funding in the wake of the global liquidity crunch.
Yards called on the government to increase financial support through the Korea Export Insurance Corp. (KEIC) and the Export-Import Bank of Korea (Korea Eximbank).
"In particular, executives requested more funds as buyers are asking for delayed payments since they are experiencing difficulty in getting the funds," an official said. He added that the government will do its part to review any suggestions made by companies to help maintain export volume and production.
Korea Eximbank has set aside 1.6 trillion won (US$1.1 billion)this year to help yards, with Seoul hinting that more could be provided if the situation requires it. KEIC has 1 trillion won to help cover ship exports.
Smaller companies that are feeling the pinch of the sluggish market and have no backlogged orders called for easing loan restrictions.
Industry insiders said that smaller companies are facing the greatest pressure in terms of funds.
"Big companies like Hyundai and Samsung are not at any risk, but some of the smaller firms that are trying to stay afloat and will be hard-pressed to stay open unless they receive support, especially if conditions do not improve later in the year," a KOSHIPA official said.