Korean companies unscathed by Turkish quake

The government is sending an advance rescue team and relief supplies to eastern Turkey after a 7.2-magnitude earthquake claimed the lives of at least 200 people and wounded more than 1,000 on Sunday, Seoul announced yesterday.

The five-member team were scheduled to depart for Istanbul at around 11 p.m. yesterday, and more personnel and supplies will be sent following consultations with Turkish authorities, the government said.

The Ministry of Foreign Affairs and Trade said there have been no Korean casualties reported, but the embassy in Ankara is still monitoring the situation to ensure no local tourists were caught in the disaster zone.

Meanwhile, Korean businesses were busy assessing whether any damages, direct or indirect, could have been inflicted on their operations in the country. The immediate outlook was positive as all are based far from the quake zone.

According to the Korea Trade-Investment Promotion Agency (Kotra), there are 38 Korean companies currently operating in Turkey. Turkey is Korea’s 37th largest trading partner.

“As most of [the companies] are located in the northwestern region, far from the southeastern region where the earthquake occurred, we expect the damage to be quite limited,” a Kotra official said.

“Unlike the massive earthquake that erupted near Istanbul in the 1990s, the latest temblor is unlikely to scar Turkey’s economy because the struck area is relatively underdeveloped,” it added.

Major companies like Hyundai Motor, Posco and LG Electronics, which have production facilities in the country, said they had not been affected by the natural disaster.

Hyundai Motor’s production plant is in Kocaeli province, while Posco’s plant is in Bursa. LG Electronics has an air-conditioner plant in Istanbul.

Turkey has been an important strategic country for many Korean businesses trying to enter European markets. Due to its strategic location, many products manufactured at plants in Turkey, including automobiles and air conditioners, are delivered to markets in Europe.

Hyundai Motor’s plant in Kocaeli produces 100,000 units a year and ranks as the fifth-largest automobile plant in the country after it began rolling out automobiles in July 1997.

Posco’s steel plant opened its doors last October and can produce up to 170,000 tons of steel each year. Most of the products are used by Korean automakers such as Hyundai.

LG Electronics’ plant is older, having been established in 2000, and now produces over 300,000 units a year.

“In recent years, Turkey has been growing into a significant market for Korean companies and is no longer seen as just a bridge to Europe,” said Lee Chul-won, an analyst at the Korea Institute for International Economic Policy.

“Turkey is considered the next BRIC nation due to its explosive growth and relative insulation from Europe’s recent credit crisis.”

According to the Turkish government, in the first half of this year the country posted on-year growth of 10.2 percent, making it the world’s most robust economy in that six-month window. China, which is experiencing its own, subtle downturn followed with growth of 9.6 percent.

By Lee Ho-jeong, Song Su-hyun [ojlee82@joongang.co.kr]