Kang Seok-hoon, Chairman of Korea Development Bank, "Quick Sale of Daewoo Shipbuilding Important, Busan Relocation Cannot Be Reversed"

[Asia Economy Reporter Song Hwajeong] Kang Seok-hoon, chairman of the Korea Development Bank (KDB), announced that he is considering supporting the semiconductor industry with 30 trillion won over the next five years. He also stated that a swift sale of Daewoo Shipbuilding & Marine Engineering (DSME) will be pursued. Regarding the relocation to Busan, he plans to continue persuading the employees.

Chairman Kang made these remarks during a press conference marking his 100th day in office at the KDB headquarters in Yeouido, Seoul, on the 14th.

He said, "Observing former U.S. President Donald Trump’s America First policy and the subsequent Inflation Reduction Act introduced by President Joe Biden, I could sense the urgent crisis awareness currently held by the U.S.," adding, "In this rapidly changing global economic environment, we must have a crisis awareness more than ten times greater than that of the U.S."

Chairman Kang pointed out, "The two pillars that have underpinned the Korean economy for decades?free trade and the principle of separating politics and economy?are collapsing," and added, "Free trade is being replaced by protectionism, and with the birth of the economic security era where security and economy are integrated, countries are focusing their national capabilities on nurturing their industries and securing global supply chains and safety." He further stated, "Moreover, the Korean economy faces enormous challenges such as digital and green transitions and the problem of ultra-low growth," emphasizing, "The ultimate goal of KDB is to raise the potential growth rate of our economy to overcome the forthcoming ultra-low growth." To this end, Chairman Kang believes concentrated investment in industries with a super-gap in technology is necessary. He named this the Republic of Korea Economic Re-Leap Project and said he plans to select and support about five industries in the future. He said, "The first project will focus on supporting the semiconductor industry," and added, "We are considering supporting 30 trillion won over the next five years, including 10 trillion won for fabless foundries, 10 trillion won for fostering materials, parts, and equipment, and 10 trillion won for memory semiconductors."

Regarding the issue of Daewoo Shipbuilding & Marine Engineering, Chairman Kang emphasized the need for a swift sale. He said, "I fundamentally think that the system where KDB is the major shareholder has now lost its effectiveness," and added, "For DSME to continue growing, continuous investment is necessary, but such investment is difficult under KDB." He continued, "The way to save DSME is to strengthen research and development (R&D) and allow a new management entity that can improve efficiency to emerge," explaining, "We are working towards strengthening competitiveness and a swift sale." He said, "A quick sale is necessary for DSME to get out of its current situation," and clarified, "Mentioning a split sale means that efforts are needed for a swift sale, and if there is someone who wants a split sale, we can consider it based on various conditions." However, he added, "Basically, selling the remaining parts excluding the defense sector overseas is impossible."

Regarding the relocation of KDB to Busan, he expressed his intention to persuade employees as the issue has been selected as a national agenda and cannot be overturned. Chairman Kang said, "The President publicly mentioned it at the 7th Emergency Economic and Livelihood Meeting on the 31st of last month, and the Prime Minister and Deputy Prime Minister also confirmed it during the National Assembly’s Budget and Accounts Committee inquiry," adding, "I hope people understand that I cannot overturn what the highest national leaders have decided."

He said, "Even if the existing Industrial Bank Act stipulates that the KDB headquarters remain in Seoul, we plan to expand business assets or bases in the Busan, Ulsan, and Gyeongnam (Bu-Ul-Gyeong) region within the scope that does not violate the law, and establish an organization to prepare various relocation plans in anticipation of future legal amendments," indicating his intention to start preparatory work for the Busan relocation.

This content was produced with the assistance of AI translation services.