Latin America the focus of conference for SMEsThe Federation of Korean Industries (FKI) has rolled up its sleeves to step up support for small and midsize companies seeking to expand in Central and South America.
As a first step, the nation’s largest business organization invited roughly 200 CEOs of small and midsize businesses to a conference where the FKI promised to strengthen cooperation with the state-run Korea Trade-Investment Promotion Agency (Kotra) and Export-Import Bank of Korea in such areas as finance and marketing.
The conference was organized as a follow-up to President Park Geun-hye’s visit to Central and South America in April that was intended to boost exports and reinforce economic partnerships.
The FKI said that for Korea, the region is the third-largest export market in the world after Asia and North America, but exports have consistently decreased since 2011 and one solution is to help small and midsize companies, which account for only 12.6 percent of exports to Central and South America.
Bae Myung-han, the head of FKI’s Large and Small Business Cooperation Center, and Kim Chang-kyu, director of the trade policy division of the Ministry of Trade, Industry and Energy, as well as experts on Central and South American markets participated in the event.
They offered tips and ideas for utilizing the government’s financial policies.
The FKI said the average GDP of Central and South American nations has reached $10,000, nearly double that of other newly industrialized nations and an indication of large domestic markets for consumer goods and services.
Brazil, Mexico, Argentina, Colombia, Chile, Venezuela and Peru were mentioned as targets for Korean companies as they represent about 90 percent of the region‘s GDP.
“Of those seven countries, Korean companies need to study Brazil, which is the recipient of about 50 percent of foreign direct investment in Central and South America,” said Lee Kyu-nam, former head of Kotra Latin America. “Mexico is another market to target as the country’s competitiveness in the manufacturing industry is fifth-best in the world.”
Ki Hyun-seo, former ambassador to Chile, said it is important for Korean companies to develop a friendly relationship with local businessmen.
“There is a business culture called the ‘Amigo market,’ which means that their business activities are operated based on interpersonal networks,” said Ki. “It could be a barrier for companies in the beginning, as cultural conflict could cause unnecessary expenses. Businesses need to study how China expanded its market share to 16.1 percent in Central and South America, because it was developed systematically over time.”
“The FKI has launched a team to support companies in the Central and South American markets,” said Bae. “We also try to pass along to small companies the know-how the country’s major conglomerates have about the market.”
BY KWON SANG-SOO [firstname.lastname@example.org]