Nearly25 percent of Korean manufacturers suffered a loss of business due to the earthquake and tsunami in Japan in March, while around seven percent benefited from the effects of the disasters.
According to a survey conducted by the Korea Chamber of Commerce and Industry (KCCI) between May 21 and 25, of some 500 local manufacturers, 24.8 percent of the respondents said they suffered losses from the natural disaster that disrupted the operations of major companies like Toyota, Sony and Toshiba.
"Hardest hit have been the machinery and electronics industries which rely heavily on Japan for parts and components, while the petrochemical and steel industries have benefited from the energy crisis and restoration efforts in the island country," said KCCI executive vice chairman Lee Dong-keun. “Power generators, bottled water and steel have emerged as high-demand export items since the disaster,” he added.
One ship and aircraft engine company said they opted for European parts and components because of the supply disruption. But due to differences in quality, they are still experiencing production difficulties.
In contrast, 7.4 percent of the respondents said their business performance improved. Many of them were in petrochemical, steel, food and beverage sectors as energy shortages in Japan boosted orders.
For instance, a power-generator equipment maker reported more orders as it supplied its products to Japan, while an excavator equipment manufacturer increased exports to Japan because of clean-up efforts there. It predicted that sales will increase 45 percent this year.Although it has been almost three months since the earthquake, 10.6 percent of those polled said they are still struggling to cope with trading problems with Japan, according to the survey, while 5 percent are seeing their exports to other countries including Japan grow.
The KCCI said that Korean companies will likely try to reduce their dependence on the supply of components from Japan as a result of the natural disaster. It said more than quarter of the respondents would seek alternative sources for parts.
“As Japanese companies turn their eyes overseas, Korean companies should let them know of their stable power supply and excellent manufacturing capacities,” said the KCCI.