SMEs in Gyeonggi Province Succeed in Localization of Parts and Move on to Global Market
Createdd 2020-02-06 Hit 27
○ Gyeonggi Province has helped local SMEs enter global markets with its “Parts Localization Support Project in Connection with Global Firms”
– Support for technological development of local SMEs in materials, parts, and equipment as well as for connecting with purchasing managers of global equipment companies
– Dongwon Parts, the most successful participating company, has seen sales triple since participating in the project.
○ SMEs recruited to participate in the 2020 project
– Promoted on Gyeonggi Technopark website from February 5 (Wednesday) to March 4 (Tuesday)
– Selected companies to be provided with up to KRW 100 million for production of localized parts prototypes and commercialization of innovative Russian technologies
Gyeonggi Province’s “Parts Localization Support Project in Connection with Global Firms” is drawing attention as it helps SMEs in the region to produce parts and equipment with domestic technologies (thereby reducing reliance on imports) and advance into global markets.
According to an announcement made by Gyeonggi Province on February 6, it is undertaking the Parts Localization Support Project in Connection with Global Firms to support the technological development of local SMEs in materials, parts, and equipment and to connect them with purchasing managers of global equipment companies that have operated in Korea since 2016.
The goal of this project is not only to supply localized parts to domestic companies, but also to introduce such parts to markets abroad through the overseas networks of global equipment companies.
The project has supported a total of 94 companies so far, and a growing number of SMEs in Gyeonggi Province are making inroads into overseas markets. Among them, one of the most successful is Dongwon Parts, located in Siheung City of Gyeonggi Province. The company produces parts for chemical vapor deposition (CVD), one step in the semiconductor manufacturing process. In 2016, Dongwon Parts succeeded in domestically producing parts that had been primarily imported through Gyeonggi Province’s parts localization support project.
Gyeonggi Province linked Dongwon Parts with the purchasing manager of Lam Research, a global semiconductor equipment company in the United States, and Lam Research decided to purchase products from Dongwon Parts due to their quality and price competitiveness. Dongwon Parts sales increased to KRW 35.6 billion, roughly a three-fold increase, after entering the partnership with Lam Research. The company is also expanding rapidly, having hired 121 new employees. Particularly its annual exports, which were only KRW 40 million in 2016, increased 84 times to approximately KRW 3.4 billion in 2019, achieving remarkable growth since receiving the opportunity to expand into overseas markets.
The “Parts Localization Support Project in Connection with Global Firms” has also promoted the commercialization of innovative Russian technologies since last year. This past October, the Gyeonggi-Russia Technology Cooperation Center was opened to match the innovative technologies of Russia, a Fourth Industrial Revolution power, and the commercialization technology of SMEs in the province, functioning as a technology matching platform.
The Gyeonggi-Russia Technology Cooperation Center serves as a practical support organization to help both Russian companies that have advanced source technologies but no capital or commercialization technologies and Gyeonggi Province’s SMEs that suffer a lack of source technologies to grow in cooperation.
Gyeonggi Province is recruiting companies to participate in the Parts Localization Support Project in Connection with Global Firms from February 5 to March 4. The selected companies can receive up to KRW 100 million each for the production of localized parts prototypes and the commercialization of innovative Russian technologies.
SMEs in the semiconductor, display, automotive, and quaternary industries with headquarters or factories in Gyeonggi Province are eligible to participate, and purchase confirmations and recommendation letters from global companies proving trade relations can be beneficial in the evaluation process.
Companies wishing to participate in the project can refer to the Gyeonggi Technopark website (http://gtp.or.kr) and the EGBIZ website (www.egbiz.or.kr), complete the required forms, and submit them to the Gyeonggi Technopark (+82-31-500-3022) via mail, online application or in person.
“Even though Korean companies perform well in global markets, if they depend highly on foreign materials, parts, and equipment, large portions of profits will go to foreign parts producers, not to them. This will also make it difficult for them to respond flexibly in crises. Gyeonggi Province will continue to build a foundation for entry by local companies into overseas markets and the attraction of investment through its parts localization support project while promoting the localization of advanced technologies,” a Gyeonggi Province official said.