Ministry of Strategy and Finance of Republic o : 9th Ministerial Meeting on Industrial Restructuring

9 Ministerial Meeting on Industrial Restructuring

Government Unveils 2017 Action Plan

for Industrial Restructuring

At the 9 Ministerial Meeting on Industrial Restructuring held on January 25, Deputy Prime Minister Yoo Il Ho discussed the 2017 action plan to accelerate the restructuring of the shipbuilding, shipping, steel and petrochemical industries, along with the reforming of Korea Development Bank (KDB) and the Export-import Bank of Korea (Exim Bank of Korea).

The following is a summary of Deputy Prime Minister Yoo's keynote address:

2017 Action Plan for Industrial Restructuring

The government will accelerate the restructuring of the following industries, with its focus on uncertainties surrounding the economy and future competitiveness to prepare for the 4 Industrial Revolution.

1. Shipbuilding Industry

The industry is required to step up self-rescue efforts in business restructuring, and the government will increase support for those affected by the restructuring.

- Require the biggest three shipbuilders to complete their self-rescue plans by over 80 percent following last year's 42 percent, which is estimated to be more than 4 trillion won worth of self-rescue efforts

- Provide business restructuring support to more than 15 subcontractor suppliers through the 5 restructuring support packages[1]

- Place an order of 1.5 trillion won worth of navy fleets to be made, and make vessel construction contracts for at least 10 vessels, which will be financed by vessel funds

- Increase support for employment retention, provide layoffs (more than 3,000) with training and employment services, and examine the extension of the special employment support given to the shipbuilding sector[2]

2. Shipping Industry

In 2017, the government will help the shipping industry prepare for a rebound:

- Start operating Korea Shipping, a public shipping company, in the first half

- Implement the 6.5 trillion won worth of financial support program as scheduled, including the purchase of Hanjin Shipping's Busan New Port terminal

- Work to facilitate cooperation and increase port competitiveness: Improve regulations to promote cooperation between shippers and shipping companies[3], and expand incentives to promote transshipment services[4]

3. Steel and Petrochemical Industries

The government will help accelerate business restructuring planned to manage oversupply, and promote the development of high value added materials.

Steel industry

- Work on approving the 6 business restructuring plans

- Promote the development of ultra light, hybrid and other advanced materials, as well as smart and eco-friendly manufacturing

Petrochemical industry

- Expand the oversupply issue to the whole chemical industry, and work to approve more than 4 business restructuring plans

- Expand R&D investment in advanced materials to support future industries, such as electric vehicles and drones

Reform KDB and Exim Bank of Korea

We need to reform KDB and the Exim Bank of Korea, for the reform will reduce the burden on the country due to corporate restructuring. So far we have implemented a number of tasks associated with corporate restructuring, such as strengthening risk management and streamlining organizational structure. In 2017, the government will complete all the remaining tasks.

Other Efforts to Facilitate Restructuring

In addition, we will promote market-based corporate restructuring, such as through vulture funds, and will announce measures to promote market-based corporate restructuring by the end of March.

Please refer to the attached pdf

[1]1) the Corporate Restructuring Promotion Act, 2) R&D support, 3) commercialization support, 4) SME restructuring support, 5) programs to attract investment in local industries

[2]Scheduled to end at the end of June this year

[3]Draw up a regulatory framework by October

[4]Applied starting in February