Building Stronger International Trade Ties
| South Korea is successfully pursuing its globalization policies. As Hwang Doo-yun, Minister for Trade, explains, “Korea is making every effort to play a role commensurate with its level of economic development and global status, by further strengthening the multilateral trading system centering on the World Trade Organization.” He says that Korea welcomes the additional trade liberalization provided by the Doha Development Agenda, and takes an active role in the efforts of ASEM and ASEAN+3 to promote regional cooperation. |
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Hwang Doo-yun
Minister for Trade
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Wan-Soon Kim
Ombudsman
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he Korean Trade-Investment Promotion Agency (KOTRA) has been instrumental in promoting foreign trade for almost 40 years. KOTRA operates the efficient Korea Investment Service Center for foreign investors, and has established a network of 98 Korean trade centers in 72 countries.
As KOTRA’s Investment Ombudsman, Wan-Soon Kim, says, “International firms are increasingly perceived as partners in Korea’s success, and this promises much for future relations between international firms and domestic partners and consumers.” |
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| Clariant (Korea) Ltd. |
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lariant, a global leader in the production of specialty chemicals, was formed from the chemicals division of Sandoz and extended by the integration of the Hoechst specialty chemicals business in 1997. The Clariant group, headquartered in Switzerland, has proved a model investor in Korea, where Hoechst had been active since the 1950s.
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“During the economic crisis, we continued to invest in Korea.”
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Friedrich A. Honigmann, President of Clariant Korea since 1990, explains the group’s long-term commitment to the Korean market. “During the economic crisis in 1998, we continued to invest in Korea through acquisitions. Currently, Clariant Korea has about 500 employees and a turnover of around US $180 million.”
Honigmann has been instrumental in the group’s renewed success in Korea, where he has introduced a modern, decentralized management style. Clariant now has five divisions in Korea, and its client list includes industry leaders like Samsung and LG Philips, as well as firms in the cosmetics, pigment, paper, detergent and leather industries, among others. Clariant also trades chemicals with other local chemical producers.
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Friedrich A. Honigmann
President
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Pointing out his company’s competitive edge, Honigmann says, “Our long history in Korea has created a great culture within the company that allows us to hire the best experts. Additionally, the enthusiasm of the Korean workforce is a substantial factor in our success.”
Honigmann is very positive about doing business in Korea. He says, “Korea is sandwiched between Japan and China, which allows businesses in Korea to provide services to each of these economies very easily. Korea is cost-competitive compared to Japan and its productivity can potentially surpass that of Japan within five years. In addition, Korean business is very open to foreign investment.” He adds that he has no worries about possible military action by North Korea because of the restraining influence of China. “US investors should not be afraid to come here,” he says.
As for the future, Honigmann predicts Clariant Korea will see a rise in turnover from US $180 million to US $300-400 million in the next four to five years.
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| DuPont (Korea) Inc. |
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he global DuPont group, celebrating its 200th birthday this year, has been active in Korea for the past 25 years, where it is well known for its core values of safety, ethics, respect for people, and environmental stewardship. The company earns around US $450 million per year in South Korea, employing 360 people in Seoul and at three locations throughout the country.
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“We are trying to bring Korea up to world-class standards.”
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DuPont Korea’s President is Nigel Budden, a native of New Zealand. He points out, “DuPont Korea is in the resale business. We import goods from all over the world and then resell them after we make some added-value adjustments.” He says that the firm enjoys a strong competitive advantage in Korea and works to give back to the community through promoting continued growth and higher business standards. As he puts it, “If DuPont can be here and can survive above the board, then anyone who wishes to can as well. We are trying to bring Korea up to world-class standards. Korea now realizes that it needs to follow reinvestment economics; making money is the bottom line.”
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Nigel Budden
President
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Budden predicts continued strong growth for South Korea, but adds that investors should be prepared to take local business practices into account. He explains, “When investors come here, they must respect the culture. Since Koreans believe strongly in Confucianism and hierarchy, it will take some time to change people’s minds, but local business people are well on their way.”
DuPont is currently working to make its market-leading brands, such as Teflon®, Lycra® and Corian®, better known among a younger generation, and Budden anticipates double-digit growth for his company in the future. He adds that DuPont separated its fiber business from the remainder of the DuPont group in January 2003. He explains, “This move affected 29 locations in 24 countries. We believe that the fiber section can do better on its own, and one option is that we could IPO it. The use of manmade fibers will increase as land is used for food and other resources. I believe this division has a promising future.” |
| Korea International Trade Association (KITA) |
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he Korea International Trade Association (KITA), founded in 1946, is Korea’s largest and most influential economic organization, and now represents more than 85,000 companies.
KITA’s activities include supporting overseas marketing and international trade cooperation, providing trade information and research services, educating international trade specialists, membership services, and various advisory and consulting services. The association has contributed greatly to Korea’s development into the world’s 13th largest trading nation through its dual roles as both a national and international trade association. “KITA exists for the benefit of foreign as well as Korean businesspeople, and we will do our best to be of service to you,” says Jae-Chul Kim, Chairman of KITA, the Dongwon Group, the Korea-US Economic Council, KT-Net, and COEX, operator of Korea’s biggest convention and exhibition center.
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“The Korean market is more open and safe than the Chinese market.”
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While political uncertainty in North Korea has provoked a decline in US investment in South Korea during the past year, Kim points out that Koreans are still very supportive of the US. “The vast majority of Korean people think of the US as a brother nation, and we would like to thank the US for both the security and the economic development that it has helped us to achieve,” he says.
The international investment community has been focusing on China in recent years, but, as Kim explains, Korea has proven its stability and generated significant returns for investors. He says, “The Korean market is more open and safer than the Chinese market. The economy of South Korea is based on free market principles, and the legal framework is fully in place to support this. In China, however, free and open investments are somewhat limited. In addition, the Korean capital and stock markets are open to foreigners.”
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Fae-Chul Kim
Chairman
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He continues, “The new government shows strong will in improving relations with North Korea on the basis of a close cooperation with the US, so we believe the problem will be short-lived.” Additionally, he points out, one of the main priorities of the new government is fostering a more attractive environment for foreign investors, particularly Americans.
Now is the time to invest in South Korea, Kim believes. He explains, “Companies and investors who invested in Korea during the economic crisis of 1997 made huge profits, and I feel that the same applies now. Northeast Asia already represents 22% of global business activity, and Korea is becoming the region’s top business hub.”
South Korea enjoys three distinct assets that will further develop the country as a northeast Asian business hub. First, the region continues to show significant growth, and Korea’s geographical positioning between China and Japan makes it a strategic logistical, tourist and business center. Next, the southern coast of Korea is regarded as the main route connecting Asia to the continent of North America. Lastly, Korea has abundant human resources with 68% of Koreans educated to college level.
Addressing potential US investors, Kim concludes, “The issues that have affected investment and trade between our countries will be resolved when the Iraq situation has been resolved. The importance of northeast Asian economies will grow, and Korea will play a crucial role in this. Invest now!” |
| Haitai Confectionery & Foods Co., Ltd. |
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aitai Confectionery and Foods Co. was heralded as a landmark leveraged buyout (LBO) for Asia when it was sold in October 2001 to UBS, JP Morgan and Citibank. The deal has drawn the attention of investors, and the government anticipates that Haitai Confectionery’s success will usher in a wave of similar LBO investing. |
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“Our name stands for quality.”
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After filing for bankruptcy in 1997, Haitai quickly recovered to achieve profits of US $70 million and now has a 22% share of South Korea’s confectionery market. Its product line includes cookies and crackers, snacks, chocolates, candies, chewing gum, ice cream and frozen foods, and it acts as South Korea’s exclusive distributor for Nestlé. Haitai sells mainly to retail outlets, discount stores and convenience stores.
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Suk Cha
President & CEO
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Suk Cha, appointed President & ceo by the company’s new owners, is responsible for reorienting the company to focus on maintaining world-class standards and operating with an international perspective. He explains, “Our company began in 1945. When the financial crisis of 1997 hit, it was a real wake-up call for this company. We have flattened the organization and there are now three layers, four counting me, whereas the old structure had 12 layers. In addition, we are now very transparent.”
Haitai operates eight plants and 18 distribution centers throughout the country, and has around 3,800 employees. Suk believes that his superior staff members are one key reason for the company’s success. He says, “We invest a lot in our people and believe that good people can make good results. Innovation is my goal.”
As for the future, Haitai will continue to produce superior products to world-class standards and to focus on building its brand name. It has recently changed its logo to reflect the company’s new, forward-thinking style.
Suk is very positive about the future of his company, which is currently ranked South Korea’s second-largest confectionary enterprise; he anticipates reaching number one status in brand recognition in the near future. He says, “Our name stands for quality.
The image we would like to have is to be best in the confectionery industry. We have a strong track record and deserve a lot of recognition.”
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| Buruso International |
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uruso International started operating in 1999 as a world-class Internet security technology company, and has continued to expand its core fields of business ever since. As a developer and supplier of software applications for Internet security products, it is a young and innovative firm in one of the most dynamic sectors of the IT market.
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“Our products are of the highest quality.”
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According to Oh Sang-Gyoon, CEO and President, “Internet security is becoming more and more of an issue in today’s fast-developing communication age. Our products are of the highest quality, but still maintain reasonable prices.”
Buruso International currently has three business arms. Its CRM product is aimed at large-scale vendors with Internet-based clients, and MyDesk is a desktop program for PCs providing secure access to service providers like e-cash vendors and Internet telephony service providers. X-Series is a software-driven virtual private network product that is sold to multinationals.
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Oh Sang-Gyoon
CEO & President
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Oh points out that the Internet has not only changed the way individuals access information and make purchases, but how companies market to them. The paradigm has changed from mass marketing on the Internet to one-to-one marketing, and Buruso International is crucially able to provide specific information at a specific time to an individual person. “We feel that this is the strength of Buruso International,” he says. “As we continue to expand internationally, the company and its investors will be poised to enjoy excellent returns on our strategic market placement.”
The company already works actively with Internet security companies worldwide, and hopes to expand its business through international partnerships and investors. This year, it plans to enter the US market and introduce its passion for new technology development to international investors. “We plan to attract and develop partnerships with similar American companies that share our aggressive and passionate attitude towards technology and its development,” explains Oh.
Buruso International plans to ultimately become a truly global player. Oh says, “Our vision is to become an active participant and player in all our business partners’ Internet programs at a global, as well as at the local level.”
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Korea International Trade Association (KITA) (back)
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World Trade Center, Gangnam-gu
Tel.: 82-2-6000-5302
Fax: 82-2-6000-5300
www.kita.org
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Haitai Confectionery & Foods Co., Ltd. (back)
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A mouth-watering country
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Buruso International (back)
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805 Dae-Ha B/D 14-11
Yoido-Dong - Seoul
Tel.: +82 2-785-4340
Fax: +82 2-785-4319
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