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A container ship operated by HMM. |
[Alpha Biz= Paul Lee] According to industry sources and POSCO Holdings on September 14, POSCO Group is reviewing a potential acquisition of HMM. The steelmaker has reportedly formed a large advisory group by signing contracts with Samil PwC and Boston Consulting Group to prepare for the deal. The Korea Shipowners’ Association (KSA) strongly opposed the move, issuing a statement on September 11.
The KSA argued that if HMM, a state-supported shipping company, were integrated into POSCO, it could be relegated to a supporting role for the steelmaker’s core business rather than functioning as a specialized shipping company. They also warned that if the steel industry faces difficulties, HMM—which was revived through the government’s five-year shipping reconstruction plan—could again fall into crisis.
For this reason, South Korea’s Shipping Act partially restricts large cargo owners from entering the shipping industry. Article 24 of the law stipulates that if a company owned or controlled by a major cargo owner—such as a steel producer—applies for registration to operate shipping services to transport its own bulk cargo, the Minister of Oceans and Fisheries must seek advice from a policy committee composed of industry and academic experts before deciding whether to grant approval.
Minister of Oceans and Fisheries Jeon Jae-soo also stated at a press briefing on September 11, “The governance issue of HMM should not be viewed as a matter of a single shipping company, but from the perspective of a national carrier and a core national industry.”
Concerns have also been raised that POSCO’s entry into shipping could begin with transporting iron ore and later expand to steel products. Such a move, critics say, could disrupt the domestic shipping ecosystem and potentially push existing Korean carriers out of the market.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
