“Large Businesses should Seek Ways of Co-existing with Foreign-invested Businesses.”  
(Published March 28, 2012)

-Briefing Session on Large Businesses’ Purchasing Policies for CEOs of foreign-invested businesses
-Joined by five large businesses and more than fifty foreign-invested businesses

◇ On March 27, a briefing session on the purchasing policies of large businesses was held for CEOs of foreign-invested businesses at the Ibis Suwon Ambassador Hotel, and attended by Vice Governor Lee Jae-yul.

On March 27, a briefing session on the purchasing policies of large businesses was held for CEOs of foreign-invested businesses at the Ibis Suwon Ambassador Hotel. During the session, representatives of foreign-invested automotive parts businesses and Hyundai Motor-Kia Motors held fierce discussions, fielding such questions as “What do you think about the difficulties experienced by U.S. automotive parts businesses in Korea?” or “Ford Motor is reported to have a plan to cut down on the number of suppliers in the short-to-mid-term perspective: What about Hyundai Motor?”

President Lee Yong-seon of Tenneco Korea, a U.S.-based automotive parts business, said, “Many American businesses wish to do business in Korea, but they find it hard to establish a local foothold due to the strong presence of local businesses. We would like Hyundai-Kia Motors to open its doors to foreign-based businesses.”

There were also questions concerning how long it takes for registration as a newcomer in order to supply large-sized businesses and the amount of exports made by secondary and tertiary businesses.

Mr. Ryu, a representative from Hyundai-Kia Motors, explained how his company was pushing ahead with growth and implementing a system of quality of control concerning its subcontractors. He also answered questions posed by the representatives of foreign-invested businesses.

He said, “Last year, we provided funds in excess of KRW 1 trillion to primary businesses. We are providing assistance to our subcontractors through the R&D Technological Support Corps or the Parts Industry Promotion Foundation, the first of its kind to be carried out by a large business in the country.” He added, “Foreign-invested businesses are on an equal footing with their domestic competitors as suppliers for us. The most important things are quality, cost, and delivery time.”

He continued, “We will make it clear that secondary businesses which have failed to obtain the SQ certification should not be allowed to supply to primary subcontractors.” The SQ (Supplier-Quality) certification refers to a process through which secondary/tertiary subcontractors of Hyundai-Kia Motors should undergo in order to be eligible to supply primary subcontractors.

During a one-hour meeting in which matters concerning semiconductors and LCDs were discussed, representatives from large-sized businesses explained their purchasing policies and answered the questions of those from foreign-based businesses.

◇ Vice Governor Lee Jae-yul said, “Foreign-based businesses can contact us whenever they need help, and we will do what we can to help them solve their problems.”

The Gyeonggi Provincial Government has held this special session for the last fouryears with a view to establishing mutual collaboration in the supply of goods between large-sized businesses’ and foreign-invested businesses, and expects that it will help more foreign-based businesses to invest in the province.

Chairman Lim Byung-hun of the Gyeonggi Association of Foreign-invested Companies (GAFIC) said, “A truly globalized business should know how to co-exist with others. Major businesses in the province should work together with foreign-invested businesses on a win-win basis.”

At present, a total of 3,186 foreign-invested businesses, i.e. 21.5% of those nationwide, are operating in the province. The recently effectuated ROK-U.S. FTA is leading many more foreign-based businesses to take an interest in investment in Korea.

The Gyeonggi Provincial Government is striving to attract more foreign-based business in collaboration with the Ministry of Knowledge & Economy (MKE), the Korea Trade-Investment Promotion Agency (KOTRA), and the Japan External Trade Organization (JETRO). It is also making concerted efforts to improve the business environment for foreign-invested businesses and provide them with effective follow-up services.

In his opening speech at the session, Vice Governor Lee Jae-yul said, “Foreign-based businesses can contact us whenever they need help, and we will do what we can to help them solve their problems. We will continue to build business models which consider the needs of employees of foreign-invested businesses including residence, children’s education, tourism, and leisure, in addition to the business environment.”

Under the leadership of Governor Kim Moon-soo, the Gyeonggi Provincial Government signed MOUs worth USD 14,408 million with 106 businesses between June 2006 and February 2012. In 2011 alone, it attracted USD 1,780 million worth of foreign investment in a total of seventeen cases, creating 9,948 new jobs.

An official said, “What we accomplished in 2011, namely a 205% Y-o-Y increase (from USD 583 million in a total of 23 cases) over the preceding year, was particularly noteworthy. It was a result of our efforts to focus on such sectors as sophisticated parts/materials, semiconductors, information technology, automotive parts and R&D businesses.”

This year, the Gyeonggi Provincial Government plans to invest KRW 140 million in the operation of buses between Seoul and Poseung, Pyeongtaek, and within the Jangan Industrial Complex as part of its drive to improve conditions for foreign-invested businesses. Other programs adopted by the province for similar purposes include get-together events between local residents living close to foreign-invested businesses; Korean language instruction for foreigners working in industrial complexes in Pyeongtaek and Hwaseong; the provision of support associated with consulting fees in seven sectors, including labor affairs; and an educational session related to the stabilization of labor-management relations.

ⓒG-News Plus / Lim Jeong-seon / jslim123@kg21.net

http://gnews.gg.go.kr/news/news_detail.asp?number=201203281241087055C052&s_code=C052