Foreign companies in S. Korea post solid gains in 2007: report

(ATTN: UPDATES with more details throughout)
SEOUL, April 13 (Yonhap) -- Foreign-invested companies in South Korea posted
solid gains in sales and exports in 2007 and enjoyed higher productivity than
their local counterparts, a government report showed Monday.
The Ministry of Knowledge Economy defines a foreign-invested firm as one in which
overseas investors own a more than 10 percent stake in the business.
The ministry's survey showed 2,301 such companies posting an aggregate of 181
trillion won (US$135 billion) in sales in the cited year, up from 166 trillion
won for 2006.
Labor productivity reached 141.8 million won, contrasting with 73.9 million won
for local firms, according to the report.
An estimated 16,000 foreign-invested firms are operating in Korea. The latest
survey focused on large-sized businesses with overseas investments exceeding
US$500,000.
Exports of products made by the surveyed firms hit US$54.3 billion in 2007, up
from $33.7 billion tallied for the previous year. Their total outbound shipments
accounted for 15.6 percent of South Korea's exports in the cited year, up from
11.7 percent in 2006.
The ministry, in charge of the country's industrial policies and investment
promotion, said the firms also employed more people year-on-year -- 267,000 in
2007 compared to 253,000 the previous year. Spending on research and development
reached 1.6 trillion won, equivalent to 7.3 percent of all such expenditures in
2007.
According to the survey, 54.4 percent of the firms' investments were aimed at the
local market, and 89.1 percent of respondents said local ventures on average
performed better than similar investments made in other Asian countries.
The findings were not all rosy. The foreign-invested firms cited excessive
competitiveness, difficulty in finding skilled workers and a high wage base as
some of the challenges they faced in South Korea.
yonngong@yna.co.kr
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