Building bridges in Latin AmericaMarking the 50th anniversary of friendly ties, Korea and a grouping of 15 countries in Latin America aim to make another significant leap forward by sharing technology and manufacturing know-how.
Since more than 1,000 Koreans first immigrated to Mexico in 1905 to work at farms, the ties between Korea and Latin American countries have mainly centered on trading natural resources, which Korea lacks.
Three years after Korea officially established friendly ties with Brazil in 1959, it forged another 15 similarly minded relationships with countries in the region including Mexico, Jamaica, Chile and Argentina.
“Korea and Latin American countries have complementary economical structures, as Korea is strong in manufacturing and they have plentiful resources,” Prime Minister Kim Hwang-sik said last week at the opening ceremony of a two-week-long event dubbed Korea-Latin America Economic Cooperation Week.
The Ministry of Knowledge Economy, which is hosting the event until today, adopted the slogan “Beyond Friendship, Toward Integration” to push the message of continued economic cooperation. A number of companies in the region including Grupo Balucelli, a construction company based in Brazil, and Hildebrando, a Mexican outfit that makes IT solutions for the telecommunication industry, gave presentations yesterday on their project plans as they hope to work with Korean partners.
Trade balance between the two sides has jumped 54-fold since 1990 to hit $19.96 billion last year. A series of free trade agreements have recently taken effect with a number of countries in the region including Chile, Peru and Colombia, which have greatly contributed to expanding trade, according to the Ministry of Knowledge Economy.
To continue economic cooperation and sustainable development, Latin American countries say that it’s important for them to welcome more companies to build large factory bases, rather than simply excavate and export the natural resources they have.
“We need to study how we are going to transform our mining experience to become a more value-added goods producer, instead of just a natural resource exporter, and I think being in a partnership with other countries is the way to do it,” said Luis Felipe Jimenez, economic affairs officer at the United Nations Economic Commission for Latin America and the Caribbean.
“There are many countries we can work with, but I think they haven’t made as much progress as Korea.”
Such sentiments are warmly received by Korean companies as they hope to expand their business projects overseas. Until now, they have mainly focused on exploring nearby Asian countries or countries in the Middle East, and bids for construction or engineering projects in Latin America have been few and far between in comparison.
Latin American countries have increasingly been choosing Korean companies for project orders, with the total of those coming from the region hitting $5.4 billion as of September this year, more than triple the cumulative amount for the whole of 2011, according to data released yesterday by the International Contractors Association of Korea.
Hyundai Engineering and Construction won a deal in Venezuela to renovate an oil refinery in June, and it has been pursuing another contract in the continent that it has not yet publicly disclosed.
Posco also won a deal to build two more coal-fired power plants in Chile in June.
“Since Korean construction companies are not doing well in the domestic market, many are eyeing a new continent where fresh developments are plentiful,” said Shin Hyun-don, a professor at Inha University who specializes in petroleum engineering.
“As Korean companies continue to win deals in South America, regardless of whether the projects are small or big, they will establish proven track records and build solid reputations that will see the number of contracts escalate.”
Many local companies have even decided to offer Spanish language classes to their employees to give them a leg up. After experimenting with a two-month course in survival Spanish in June, Hyundai E&C decided to add more classes including an intermediate-level one for people who want to advance their education.
Daewoo E&C has also been providing language classes since March after its CEO Seo Jong-uk announced his plan to expand business operations to Latin American countries.
Korea is also seeking to diversify its interests in the region.
Samsung Electronics COO Jay Y. Lee said last week he would meet with Telmex CEO Carlos Slim, the world’s richest man, over Lee’s two-week business trip to Mexico and the United States to seek ways to cooperate on building future networks.
By Lee Sun-min [email@example.com]
More in Industry
Hanwha Techwin continues selling CCTV systems overseas
Popeyes to close all branches in Korea this month
Contract signed for Covid-19 vaccine
Teas the season
Empty Chairs at Empty Table