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Korea-Japan exchanges in SMEs should be expanded

Posted March. 17, 2023 07:45,   

Updated March. 17, 2023 07:45


The Korea Die Mold Cooperative (KDMC), a group of mold companies that create the “framework” necessary for producing various products, plans to hold a mold exhibition in Japan next month. This will be the first time in four years since an exhibition holding in Japan has been suspended since 2019 due to the spread of COVID-19. “The amount of Japan-bound work has been cut in half, but if exchanges between Korea and Japan increase again, the number of orders will increase. Given the lack of domestic orders, mold orders from Japanese companies will provide an important source of revenue,” said KDMC Chairman Shin Yong-moon.

Unlike the recent rapid growth in exports by SMEs in the consumer goods sector, such as cosmetics and clothing, exports in the manufacturing sector have steadily declined due to the strained relationship between Korea and Japan and the COVID pandemic. According to the Ministry of SMEs and Startups on Thursday, Korean SMEs' mold exports among the top 10 export items to Japan last year decreased 15% YoY to 28.2 million dollars, indicating a downward trend for three consecutive years. Auto parts exports dipped 4.4% YoY as well. However, exports of semiconductor manufacturing equipment (26.2%) and petroleum products (18.9%) increased, which seems to be largely influenced by the rapidly increasing demand for semiconductors and petroleum products following the COVID-19 outbreak.

Experts point out that the compromised supply chain should be restored and exchanges with Japanese companies should be bolstered to improve the competitiveness of domestic SMEs and mid-sized companies and expand their sales channels. “Considering the evident supply chain crisis, being close to a competitive supplier and consumer like Japan is positive for domestic companies in terms of cost reduction, quality improvement, and stability," said Heo Yoon, a professor at Sogang University Graduate School of International Studies. "This is why localization efforts in materials, parts, and equipment must continue while cooperating with Japan.”

Lee Sae Saem iamsam@donga.com