Asia Times: ANALYSIS: How Korea is shaping up, sector by sector



	April 09, 1999	atimes.com

The Koreas

ANALYSIS: How Korea is shaping up, sector by sector

SEOUL - Growing signs of business recovery in South Korea are emerging.

Production and consumption have been rising measurably in such cyclical sectors as cars, electronics and other durable goods. Some sectors are seeing continued sluggishness like shipbuilding, but the overall business outlook got brighter during the first quarter.

The following is an industry-by-industry analysis of business in the first quarter.

AUTOMOBILES: The domestic market grew by as much as 70 percent in the first quarter from the same period last year. Hyundai Motor (KSE: 05830) sold 121,946 units during the first quarter, up 70.6 percent from a year earlier. Daewoo Motor and Kia Motor (00270) sold 70,518 and 49,368, respectively, up 58.4 percent and 40.6 percent. In exports, Hyundai posted an 8-percent rise by shipping 133,7609 units, Kia 95,665, up 10.8 percent, and Daewoo 85,919, up 27.2 percent.

HOME APPLIANCES: Manufacturers, which saw hard times until early January, saw new products like large-sized refrigerators lead a business turnaround after February. LG Electronics (02610) saw domestic sales drop 12 percent in January but rebounded to post a 10-percent rise in February. Its March sales here are expected to jump 30 percent to about 140 billion won (US$114 million). Samsung Electronics (05930) said its domestic sales are recovering, led by large-sized TVs, refrigerators and washers, and expects even better business during the second quarter.

SEMICONDUCTORS: Exports during the first two months of this year reached US$3.02 billion, up 15 percent from a year earlier. From March, however, the export unit price of 64-M DRAM has been falling, consequently slowing the growth rate during the first quarter. The industry originally expected that the DRAM market wou revitalized by the increasing demand for PCs. Business, however, has not picked up as expected as the downward price trend is expected to continue through the second quarter.

CONSTRUCTION: Domestic construction contracts totaled 9.84 trillion won in value during the first quarter, down 27.8 percent from a year earlier. Building orders secured in foreign markets, however, jumped 300 percent to $2.57 billion. Economic recovery measures taken by the government, including early implementation of public-works projects, have been slowly paying off.

SHIPBUILDING: Orders during the first two months reached 699,000 tons for 13 ships, up 53.4 percent in tonnage from the same period of last year. In March, orders were limited to four to five small ships. As a result, first-quarter orders amounted to about 800,000 tons, down about 10 percent from a year earlier.

OIL REFINING: The industry saw a slight turnaround in the first quarter. Average daily gasoline consumption in January and February reached 162,000 and 171,000 barrels, respectively, up by 138,000 barrels and 134,000 barrels. A brighter business outlook is expected during the second quarter as demand for oil in the industrial sector and sedans is expected to rise.

PETROCHEMICALS: Like oil refining, the petrochemical sector saw only marginal improvement. First-quarter productioon reached 342,000 tons, up 4.6 percent, and the operational rate recovered to the 90-percent level. The prices of products had been weak until early March, but from mid-March, prices began to rise in line with a hike in the price of crude oil.

STEEL: Crude steel production and shipments shrank 9.3 percent in Jauary and February to 6.07 million tons from the same period last year. Exports during the period also dropped 14.7 percent to 2.07 million tons. Domestic demand inched up about 1 percent to 4.97 million tons, foreshadowing signs of a domestic business recovery. Crude steel imports, however, jumped 20 percent to about 964,000 tons.

(Asia Pulse/Yonhap)

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