South Korean Market | FASTENER EURASIA MAGAZINE
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SOUTH KOREAN MARKET INSIGHT

Korea has the 12th largest economy in the world, with a value of USD 1.6 trillion. Korea’s economic fundamentals are solid, with its trade volume having reached USD 1 trillion for three consecutive years, ranking 8th in the world, and with the 9th largest foreign exchange reserves in the world.

The country’s economy is stable and capable of supporting continuous business operation and growth. Despite the effects of the COVID-19 pandemic, the 2020 growth outlook of Korea was among the highest of OECD member countries.
Korea ranks the 2nd in the “2020 Bloomberg Innovation Index”, topping the list for seven consecutive years in Asia.

The country is among the top 5 in the categories of R&D Intensity, Manufacturing Value-added, High-tech Density, and Researcher Concentration. Its infrastructure for innovation is a primary reason that a number of global companies have been investing in Korea.
Korea possesses optimal logistics infrastructure connecting it with major countries and cities around the world.

Located between China and Japan, it is the center of aviation and maritime logistics connecting the Asia-Pacific region as well as Eurasia and the Americas.
Furthermore, it has the potential to establish a land-based route penetrating the Eurasian continent.

TRADE
Korea is the 7th largest exporter in the world. Exports from Korea are led by the manufacturing industry, and major items of export include semiconductors, automobiles, automobile parts, oil products, and displays. Since the worldwide outbreak of COVID-19, exports of consumer goods, medicine, and medical supplies have surged. Korea International Trade Association (KITA) said pharmaceutical exports as of September in 2020 stood at over USD746 million, a 93.6% jump year-over-year. The figure surpassed USD 700 billion mark for the first time.

AUTOMOTIVE PARTS
The auto industry ecosystem that has been created based upon Korea’s experience of manufacturing over four million cars annually works as a foundation for continuous growth of the automotive parts industry.
As an IT powerhouse, Korea has capabilities to respond to making smart cars, which leads to high expectation for continuous growth in the future.

Eight Korean companies were included in the 2019 Top 100 Automotive Parts Companies Ranking list (based on sales). The total sales of those eight companies was USD 57 billion, accounting for 6.8% of all 100 automotive parts companies.
The sales of the Korean automotive parts industry in 2019 reached USD 65.4 billion (KRW 76.1 trillion), up 6.5% YoY. Thanks to the growth of front industries, the sales of the automotive parts industry has grown continuously by 2.9% every year on average, starting from USD 51.8 billion (KRW 58.8 trillion) in 2010.

OEM accounts for the highest proportion at 66.5%, followed by exports at 28.8%, and AS parts at 4.7%. The proportion of automotive parts out of all exports in 2019 reached 4.2%, and the surplus in balance of trade was also as high as USD 17.1 billion, Export items include other automotive parts, transmissions, frame parts, and brake parts.

Source: Statistics Korea, Korea International Trade Association

AEROSPACE
The Korean aerospace industry has continued its growth since 2017. In 2019, the production of the aerospace industry reached USD 2.8 billion, up 8% YoY. Growth in the areas of airframes, engine parts, space, and unmanned vehicles have been singled out as having contributed to the increase in production and export compared to the previous year.

Boeing, the world’s largest private aerospace company, has established the Boeing Korea Engineering and Technology Center in Seoul, the largest of its kind, and has been conducting research on next-generation aerospace technologies.
In its MRO center in Yeongcheon Hi-tech Park in Daegu-Gyeongbuk Free Economic Zone, Boeing has been testing and repairing avionics parts, such as for the F-15K.

IAT, a joint venture between Korean Air and UTC from the US, has opened an aircraft engine MRO center in Yeongjong zone in Incheon Free Economic Zone, at which aircraft engines have been tested.


MACHINERY
According to the Korean Standard Industrial Classification (KISC), the machinery industry refers to five types of businesses: general machinery, electrical machinery, precision machinery, transport machinery, and metal products (fabricated metal).

Korea’s machinery industry has maintained price competitiveness, and an ecosystem connecting related industries, such as automobiles, aviation, shipbuilding, semiconductors, and displays, is well established. Korea ranks 3rd in the global semiconductor market, 6th in precision equipment production and 7th in exports. It is expected that the expansion of smart factories—one of Korea’s key industries—will help strengthen production capacity of the manufacturing system. Korea’s robot density (the number of robots per 10,000 human workers) is the 2nd highest in the world, and Korea has introduced the 4th largest number of industrial robots in the world.

The machinery industry, out of all manufacturing industries, ranked 6th in terms of production, 1st in terms of the number of companies, 3rd in terms of the number of employees, and 4th in terms of added-value.
The average annual export growth over the past five years from 2014 to 2019 was 3.0%, and the average annual trade balance growth was 15.6%. The export of semiconductors, in particular, recorded USD 5.24 billion, up 9.4% YoY.

SHIPBUILDING & MARINE
As the global cargo volume increased following the rapid economic growth of China in the early 2000s, the Korean shipbuilding industry showed continuous growth. Among the big three shipbuilding countries (Korea, China, and Japan), Korea has shown a competitive advantage by receiving orders of ships with high added-value (extra-large tankers, container ships, LNG carriers). In 2019, the amount of orders received by Korean shipbuilders was 9.43 million CGT, taking the lead in the global market with a 37% share, followed by China (34%) and Japan (13%).


Source: Invest Korea

 

Fastener Export  by S. Korea
 

Unit : US Dollar thousand

Importers

Exported value in 2015

Exported value in 2016

Exported value in 2017

Exported value in 2018

Exported value in 2019

Total

753,576

902,444

858,265

908,524

880,053

USA

189,468

196,124

173,657

189,270

189,519

China

157,869

239,592

193,100

166,294

131,012

India

35,640

59,947

73,096

76,953

86,181

Japan

46,817

47,332

47,221

52,106

70,809

Mexico

24,769

39,997

50,037

58,351

63,435

Vietnam

36,520

38,162

38,889

38,375

44,528

Czechia

27,407

26,933

34,282

39,769

35,354

Slovakia

26,397

24,854

25,134

26,244

24,746

Slovenia

17,982

20,213

20,524

22,349

20,603

Thailand

9,122

11,477

12,660

13,861

20,181

Brazil

11,463

11,715

17,162

18,201

20,116

Poland

7,876

9,601

12,833

18,554

19,600

Turkey

15,314

15,318

16,069

15,454

17,975

Russian Federation

8,676

9,938

13,860

15,901

13,362

Germany

9,179

8,584

11,389

16,871

12,177

Uzbekistan

3,671

4,230

5,067

10,805

11,210

Canada

10,143

13,955

16,129

10,841

8,388

Malaysia

6,919

8,478

7,539

7,269

8,201

United Kingdom

5,841

10,559

5,144

6,136

7,890

Indonesia

4,449

3,953

7,491

7,119

6,463

Source: ITC

 

Fastener Imports by S. Korea

Unit : US Dollar thousand

Exporters

Imported value in 2015

Imported value in 2016

Imported value in 2017

Imported value in 2018

Imported value in 2019

Total

592,040

493,884

513,028

544,545

530,587

China

187,909

174,516

190,181

200,391

192,645

USA

137,405

111,736

129,414

137,394

147,126

Germany

34,795

30,281

34,267

39,639

35,100

Japan

26,656

44,048

33,562

36,421

29,602

Taiwan

28,353

27,210

33,240

33,506

28,499

France

13,256

14,349

17,121

16,268

16,241

Thailand

613

1,464

5,886

7,309

10,796

Italy

8,801

5,797

6,431

7,777

9,027

United Kingdom

74,668

29,719

7,474

12,508

7,889

Switzerland

7,061

5,094

5,983

7,586

6,385

Finland

191

174

292

168

5,332

India

2,556

2,999

4,292

5,807

5,324

Vietnam

3,873

3,931

4,814

3,515

5,011

Malaysia

8,364

5,744

3,270

6,924

4,677

Sweden

3,800

4,258

6,260

3,782

3,139

Philippines

5,204

3,902

3,923

3,454

2,953

Mexico

952

2,176

2,647

2,997

2,914

Canada

3,024

2,661

2,664

2,352

2,323

Spain

1,641

1,514

1,369

1,467

2,124

Turkey

559

1,197

1,483

1,776

1,694

Source: ITC