The Korea Shipowners’ Association (KSA) has formally urged Posco Group, South Korea’s largest steelmaker, to withdraw its interest in acquiring HMM, the nation’s biggest shipping company. The association raised concerns that such an acquisition could destabilize the country’s shipping industry and weaken its competitiveness in the global maritime sector.
KSA Warns of Risks to the Shipping Industry
In an official statement, KSA expressed that if Posco takes over HMM, the entire South Korean shipping industry could face instability. The association highlighted that the global maritime sector is becoming increasingly controlled by a few dominant players, while major nations like the United States, China, and Japan are focusing on strengthening their domestic shipping companies.
KSA emphasized that this is a critical time for South Korea to enhance its maritime expertise and competitiveness. However, allowing a steel-focused company like Posco to manage a shipping firm may lead to inefficiency and potential failure, especially given Posco’s limited experience in the sector.
Lack of Maritime Expertise and Past Failures
The KSA also pointed out that Posco lacks the professional background necessary to operate a large-scale shipping business. The association recalled that Posco’s earlier attempt to enter the maritime industry through Keoyang Shipping had failed, eventually leading to the company’s sale to Hanjin Shipping.
Furthermore, KSA referenced a 2022 memorandum of understanding between Posco Flow and KSA, which included a commitment from Posco not to re-enter the shipping industry. The association reiterated that industry consensus favors Korea Ocean Business as the major shareholder of HMM, rather than any specific private company.
Posco has confirmed that it is still reviewing the potential acquisition of HMM as part of its long-term business diversification strategy but has not reached a final decision. While the steelmaker believes the deal could provide growth opportunities, industry analysts and the KSA remain skeptical about the strategic fit and potential synergies between steelmaking and shipping. The outcome of this debate could significantly shape the future of South Korea’s maritime sector.
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Source: Llyod’s List
