It has been found that the number of venture firms with sales of at least 100 billion won exceeded 400 last year in Korea. This is a six-fold increase compared to eight years ago, when such statistics began to be compiled.
At the same time, no less than 54 venture companies broke the 100 billion won sales mark for the first time last year, and in spite of the global economic recession. Nevertheless, the net increase rate in the number of such firms, which had been over 20% since 2005, fell to single digits in 2012.
The Small & Medium Business Administration (SMBA) and the Korea Venture Industry Association published statistical data for 2012 on July 16. According to them, 416 venture firms in Korea posted total sales of 100 billion won or higher as of the end of last year. The number stood at 102 in 2006 and has increased consistently to 202 in 2008 and 315 in 2010.
“Not only is the sales growth rate of venture companies, which stands at 9.1%, higher than those of big businesses at 5.1% and small and mid-size firms at 3.5%, but also their operating profit ratio has surpassed that of major corporations by a margin of 1.7 percentage points to reach 6.5%,” said SMBA Commissioner Han Jeong-hwa, adding, “Furthermore, they contributed greatly to job creation, hiring 146,016 people in 2012; an employment growth rate of 8.6% year-on-year.”
Venture firms take an average of 17 years from foundation to pass the 100 billion won mark. Those in the telecom and broadcasting equipment manufacturing sectors take 11.2 years on average, while it can be as long as 20 years for firms in the energy, medical, food and beverage, textile and metal industries.
In particular, six companies; NPD, Daewoo Display, Yukil C&S, U-Bis, A-Tech Automotive and Wonik Materials, reached the target in less than seven years by dint of their market penetration efforts and aggressive R&D investment. NPD, a wholesaler and retailer of mobile phone components, was able to achieve the accomplishment in just three years.
As many as five venture firms posted sales of one trillion won in 2012. NHN’s gross sales totaled 1.51 trillion won in 2012; remaining over one trillion won for five consecutive years. It was followed by Nexon Korea (1.11 trillion won), Korea Nitto Optical (1.07 trillion won), Sungwoo Hitech (1.01 trillion won) and Yura Corporation (1.01 trillion won). These four joined the ranks for the first time in their history last year, while Samdong’s gross sales fell from over one trillion won to 830 billion won during the same period. Humax (880 billion won), Seoul Semiconductor (860 billion won) and Moneual (830 billion won) followed.
“The data shows that venture firms are opening up overseas markets very successfully through consistent R&D investment, and as a result recording stellar growth and profitability despite adverse economic conditions,” added the commissioner.