SK Government to Announce New Measures for Ailing Industries

by YuGee / Sep 22, 2016 06:43 AM EDT

SOUTH KOREA - FEBRUARY 21: An employee of Daewoo Shipbuilding & Marine Engineering Co. (DSME) walks past a ship being constructed at the company's shipyards in Geoje Island, South Korea, on Wednesday, Feb. 21, 2007. A rising tide of orders for containersh

A report from Yonhap News Agency stated that according to the statements of some officials, the South Korean government will soon declare a set of fresh measures which focus on improving the competitiveness of ailing industrial sectors which are anticipated to have massive layoffs and substantial cuts in output.

A government official said, "The government is expected to announce its plans to improve the competitiveness of three industrial sectors on the 29^th or 30^th of September."

The proposed measures will particularly focus on the country's shipbuilders, chemical firms, and steelmaking companies. The measures will also be based on the outcome of present reviews of the three industrial sectors by three private consulting companies.

An official from the Ministry of Trade, Industry, and Energy told reporters, "Reports on each industrial sector are almost complete, with the consulting firms now working to resolve differences between businesses in each industrial sector that will be affected by the restructuring measures."

The details of the restructuring measures have not yet been announced to the public , however, the official said that the measures will be "long-term plans" that aim to improve the competitiveness and sustainability in the mentioned sectors.

Previously, the government stated that the three shipbuilders - Daewoo Shipbuilding & Marine Engineering Co., Hyundai Heavy Industries Co., and Samsung Heavy Industries Co. - will have to relinquish up to 30 percent of their overall workforce by 2018 to survive.

The current review by McKinsey and Company is anticipated to suggest a large reduction of the companies' production facilities. However, it will probably not include consolidation of the three shipyards into two as earlier recommended.

The steelmaking industry is also expected to deal with a call for mergers and acquisitions, as suggested by the ongoing analysis by Boston Consulting Group. The analysis is said to have determined a large number of marginal companies over evolving competition from Chinese steelmakers.