78 Percent of Manufacturing Plants to Move Overseas

77.9 percent of enterprises have moved to plants abroad or have plans to. Companies are likely to shift the base of production to foreign countries in 3 years.

Korea Chamber of Commerce and Industry (KCCI) announced on the 16th that out of a total 213 surveyed manufacturing companies in the Metropolitan area, 44.1 percent of them already moved their production base abroad, and 33.8 percent are considering the move.

Especially noteworthy, is that 42.6 percent of the companies which have moved the plants overseas answered that they are reducing domestic hiring, and that the worries about unemployment is worsening with the increase of the movement overseas. 74.5 percent of the companies said some plants of which were already shifted revealed the plan of additional moves.

Companies’ overseas moving might be boomed from 3 years later, as companies plan to move after 3 years (76.3 percent), within 2 or 3 years (18.1 percent), and within 1 year (0.6 percent).

Among the areas that companies selected for the production base, China was chosen by 65.2 percent. Southeast Asia (13.8 percent), America (5.5 percent), and Japan (5.5 percent) followed in order.

Companies listed reduction of cost (35.6 percent), securing working power (27.1 percent), finding new markets (15.8 percent), securing raw materials (7.6 percent), and strategic cooperation with local companies (5.1 percent) as the reasons for overseas movement. Most important, 48.5 percent out of total surveyed companies said that they would shift even the production of high yielding goods abroad.

Dong-Won Kim daviskim@donga.com