Office of Commercial Affairs,
Royal Thai Embassy in Korea
1. Subject: S. Korea’s Rice Output Will Fall 10% This Year
Date: October 11, 2010
Source: Mail Business Newspaper
South Korea will see a 10% decrease year-on-year this year in rice production due to poor crops caused by short sunlight days and typhoons along with reduced agricultural land.
Nevertheless, the output is currently in excess of demand that the government plans to purchase and put the extra volume out of the market.
Statistics Korea said on October 8 that this year’s rice production is estimated to reach 4,346,000 tons, down 11.6% from last year and down 2.4% from the annual average.
“Agricultural fields fell by about 3.5% but short sunlight days and typhoons cut the output per unit space by 8.4%,” said an official at Statistics Korea.
Rice demand, however, is estimated to reach 4.26 million tons, making it inevitable for the government to spend money to stabilize rice prices in the market.
“The extra rice of 86,000 tons will be purchased for the same price as that to be reserved in the national granary from October 25,” the agricultural ministry said
The government projected the rice price already rose 7.7% in October due to reduced agricultural land, according to a survey.
The survey was based on 6,808 sample rice zones across the nation as of September 15.
2. Subject: KRX opens Laos project
Date: October 11, 2010
Source: JoongAng Daily Newspaper
Officials behind the Lao Securities Exchange - established by the Korea Exchange and the government of Laos - held a ceremony yesterday in Vientiane, Laos, to mark a major milestone for the project.
The stock exchange’s facilities and IT infrastructure technology have now been set up, and officials said they are on target for a January launch. KRX signed an agreement in 2007 with the Laotian central bank to open a stock market. The two sides recently finished training professional workers and drawing up plans for the stock exchange. The effort is the first major joint stock market venture between an emerging and advanced economy.
Shares will be divided up between the Laotian central bank and KRX, with the former taking 51 percent and the latter 49 percent. The Laos central bank was responsible for the land and building, while KRX spearheaded development of the IT system. Kim Bong-soo, chairman of the KRX board, and Lee Geon-tae, Korea’s ambassador to Laos, attended the ceremony.
3. Subject: More big tycoons jetting in for G-20
Date: October 12, 2010
Source: Yonhap News
More big corporate names, including Bill Gates, Peter Voser from Royal Dutch Shell and Michel Pebereau from BNP Paribas, were added to the list of leaders taking part in the Seoul G-20 Business Summit on Nov. 10 and 11.
According to the Seoul G-20 Business Summit Organizing Committee yesterday, 15 new companies were added to the list of attendees, bringing the total to 112 participants.
New companies added to the list in the IT sector included Alcatel-Lucent, a leading telecommunications equipment provider; China Mobile, China’s largest telecommunication provider; Cisco Systems, a leading networking systems provider; Hewlett-Packard, a major computer manufacturer; and Research in Motion, the famed maker of Blackberry phones.
In the finance sector, participants will include Bank of America; Barclays Capital; BNP Paribas, France’s biggest bank; Industrial and Commercial Bank of China, China’s largest bank; ING Group, the Netherlands’ leading financial group; and JPMorgan Chase, a leading U.S. financial group.
Other participants include Royal Dutch Shell, the global energy company; Denmark’s AP Moller Maersk Line, the world’s largest shipping company; and McGraw-Hill, an international publisher and data provider.
Microsoft founder Bill Gates will participate on behalf of the Bill & Melinda Gates Foundation.
But Steve Jobs, the CEO of Apple, will not participate because of personal reasons.
“The participants of the Business Summit are people that lead most of the world’s economy,” said a representative from the organizing committee. “A lot of the attention is focused on familiar names, but these are major corporate leaders that will contribute greatly to the summit.”
The committee said that 26 companies from non-G-20 countries will take part in the summit, including companies from Spain, the Netherlands, and Denmark.
The IT sector leads all industries with 35 participants, followed by 28 in finance, 25 in energy and 24 in other sectors.
4. Subject: Kimchi storage items get boost from cabbage prices
Date: October 13, 2010
Source: Mail Business Newspaper
Consumers, hit by rising cabbage prices, are exploring ways to stretch out their supplies of kimchi and resorting to growing their own vegetables to deal with the kimchi crunch.
According to Auction, one of the nation’s biggest shopping Web sites, sales of airtight storage containers for kimchi soared 64 percent from Sept. 10 to Oct. 9. Other popular products include home vacuum packaging devices, which can help keep kimchi fresh for longer periods by sucking out the air from the wrapper after being sealed.
Auction also reported a 50 percent jump in kimchi refrigerators - refrigerators designed exclusively for kimchi storage - in the same period. Kimchi refrigerators can cost between 400,000 won ($358) to 1.2 million won.
“Sales for kimchi storage containers usually increase starting in late November as the kimchi-making season gets going, but because of the current cabbage shortage, demand is increasing earlier this year,” said Kim Hyun-joon, a team leader at Auction. “Consumers seem to be trying to increase the shelf life of expensive kimchi and vegetables.”
In addition, consumers are also buying “plant factories” to grow their vegetables. Insung Tech, a company based in Yongin, Gyeonggi, that makes the product is busy answering calls from customers, including conglomerates, farmers and landlords, said Ahn Hyung-joo, a director at Insung Tech. The company’s indoor “plant factories” artificially control the elements for growing vegetables, including light, water levels, temperature, humidity and soil nutrients - all within a limited space.
Although the units are expensive, the sharp rise in vegetable prices - not just cabbage prices - means that they are seen as becoming more affordable. “Though lettuce grown in one of our units used to be more expensive than that sold in the market, the skyrocketing prices of lettuce mean our prices have become more competitive,” said Ahn.
Lotte Mart, which started operating a small “vegetable factory” in July at its Seoul Station outlet in central Seoul, is reporting increasing sales for the lettuce it grows on the premise.
Consumers are also trying their hand at growing their own vegetables the traditional way. E-Mart said earlier this month that overall sales of do-it-yourself farming products such as seeds, pots and soil have increased by 17 percent.
Lotte Mart announced that it will import an additional 80,000 heads of cabbage from China since high demand caused them to sell 30,000 heads within 30 minutes this week.
5. Subject: Korea’s PPP per capita global ranking is 22nd - The nation is closing the gap with Japan on this measurement
Date: October 13, 2010
Source: Yonhap News
Korea’s per capita purchasing power is expected to reach $29,790 this year, placing it 22nd in the world, a report by the International Monetary Fund (IMF) said yesterday.
This year’s purchasing power parity (PPP) is up $1,852 from the comparable figure tallied for 2009, the economic outlook report said. This places the country just behind France and Japan, whose per capita spending power is expected to reach $34,092 and $33,828, respectively. Korea’s PPP this year is also larger than the country’s nominal per capita gross domestic product (GDP) that may hit $20,164 in 2010.
The PPP index is used to gauge actual living standards by measuring purchasing power of people in different countries on the assumption that living costs and currency exchange rates are equal around the world. The figure may be larger or smaller than the per capita GDP because of differences in consumer prices, various services and utility costs. Besides South Korea, 10 other countries, including Taiwan, Singapore, the Czech Republic and Portugal, had PPP numbers exceeding their respective GDP.
The latest IMF report, meanwhile, showed Luxembourg, Singapore and Norway to have the highest per capita PPP in the world this year, trailed by the United States. Luxembourg’s PPP could top $80,000, with Singapore and Norway surpassing the $57,000 and $52,000 marks, respectively. Countries such as Spain, Italy, Israel and Greece may have marginally lower per capita PPPs compared to Korea.
The findings said Korea’s PPP numbers will continue to grow steadily to reach $38,767 in 2015, which could further narrow the gap with Japan, whose per capita PPP may hit $40,195 then.
6. Subject: Firms complain about strong won - Exporters fear falling profit margins on currency rise
Date: October 14, 2010
Source: JoonAng Daily
Jo Bung-gu, 45, is CEO of Komac Heavy Industry, a construction machinery company. He is now in agony trying to decide whether to raise the firm’s price of products because of the strengthening won.
The company makes 20 billion won ($17.68 million) every year and the export accounts for more than 95 percent of the sales. “If the won raises to nearly 1,000 won against a dollar, we will have to raise the price of our main product by over $500 to break even,” said Jo. “If we raise the price, orders will likely drop around 10 percent. It’s even difficult to hedge because of the recent crisis over currency derivatives.”
Jo’s plight underscores the problems exporters are facing because of the stronger won, which could soon raise to 1,100 won to the U.S. dollar.
Samsung Economic Research Institute estimated that 91 major domestic exporters could lose 5.9 trillion won ($5.2 billion) in profits if the won soars to 1,050 to the dollar. According to the survey conducted by the Korea Chamber of Commerce and Industry of 504 exporters, about half of the companies said a won rate between 1,050 to 1,100 won to the dollar would still secure profit margins.
Lee Seung-jun, a researcher at the Institute for Trade, said, “The problem is the speed of the rising value of the won rather than the value itself.”
Small businesses face deeper problem. The CEO of an IT company, whose exports account for 90 percent of total annual sales of 70 billion won ($ 61.9 million), said: “We received contracts for roughly $1.2 million at 1,200 won against the greenback in July. “The profitability substantially decreased in just three months because the won rose by about 10 percent,” Kim said.
Large companies are busy preparing measures if the won reaches 1,000 to the dollar.
About 55 percent of the domestic production of Hyundai Motor and 65 percent of Kia Motors are exported.
“If the value of the won rises by ten won against the U.S. dollar, the combined annual revenue of Hyundai Motor and Kia Motors will loose 200 billion won ($ 176.8 million),” said a Hyundai Motor official.
“In an effort to lessen the impact of the currency fluctuation, we have been expanding our production overseas while working to restructure our operations so we could still enjoy operating profits if the won appreciates to the 900 won ($0.8) level.”
Samsung Electronics claims that the recent won appreciation is well within the range that they had expected earlier this year. The leading chipmaker said since the company’s production and sales are globalized it hasn’t been affected by the recent currency moves. However, if the current situation continues, it will eventually have a negative effect on the operating profit.
Posco said it is minimizing currency risks by using foreign currency to import raw materials.
In contrast, the aviation industry welcomes the won appreciation which has encouraged people to travel aboard while lowering the cost of imported oil and reducing foreign currency debt. A 10 won rise against the dollar adds 54 billion won ($48 million) in annual profits for Korean Air and 6.8 billion won ($6 million) for Asiana Airlines.
7. Subject: KT has its head in the clouds with new projects
Date: October 15, 2010
Source: DongA Ilbo
KT, the nation’s second-largest telecommunication service provider, announced details yesterday of its new cloud computing projects, saying it will work with local small businesses, boost resource efficiency, lower costs and contribute to green IT development.
The company outlined its plans during a forum for CEOs from the IT industry held at the COEX InterContinental Hotel in Samseong-dong, southern Seoul.
Cloud computing allows users in various locations to access data stored on remote servers via the Internet. Companies can set up their own private cloud networks so that employees and executives can exchange information from virtually anywhere in the world. Another form of cloud computing involves networks that are open to the public.
KT is pumping a lot of resources into cloud computing, seeing it as promising area given that the amount of digital data growing exponentially.
As part of these efforts, the company said yesterday that it will incorporate both wired and wireless networks to handle and manage its data. KT is also looking to grow by hooking up with small and midsize enterprises (SMEs).
The company outlined several models for joint growth with SMEs, including one that involves developing a cloud computing network to cooperate with smaller firms on new projects. KT also said it will attempt to partner with schools for joint development in cloud computing.
“In a recent test of cloud computing performance by testing agency CloudHarmony, we ranked first or second in five test categories compared with top global companies,” said Suh Jung-sik, senior vice president of KT’s cloud-service business unit. “This proves that we are able to offer world-class service in cloud computing.”
The company added that its corporate cloud storage service, called uCloud Pro, racked up 500 clients in two months and will likely hit 1,000 by the end of the year.
KT officials said the company’s cloud services are generating increasing interest among local SMEs, conglomerates and universities as well companies across the Asian region.
Source : http://www.depthai.go.th