SIMTOS Newletter July - Amazing Korea

1. Machine Tool Market Trend in June

 

☐ (Orders) ‘15. June Machine Tool Order ￦2,635B(MoM +6.0%, YoY -6.0%)

o (Domestic Orders) ￦1,721B(MoM +33.5%, YoY +19.2%),

   (Export Orders) ￦914B(MoM -23.6%, YoY -32.8%)

o (By product)

NC Metal Cutting(￦2,148B, MOM -3.2%)

Metal Cutting (￦80B, MOM +8.4%),

Metal Forming(￦ 407B, MOM +112.8%)

o (By industry)

Automobile(￦818B, MoM +95.3%),

Steel‧Nonferrous Metal(￦115B, MoM +39.5%),

Machinery(￦279B, -14.2%), Electric‧Electronics‧IT(￦157B, MoM -10.8%)

*Metal products(￦75B, +1.4%), Shipbuilding‧Aviation(￦87B, +33.1%),

Precision Machinery(￦31B, +10.1%)

o Machine Tool Orders(January ~ June) ￦19,573B(YoY +1.8%)

(Domestic Orders) ￦9,006B, -5.6%,

(Export Orders) ￦1,567B, +9.0%

 

□ (Production)

‘15, June Machine Tool Production ￦3,015B(MoM -4.3%, YoY -2.4%),

Shipment ￦2,935B(MoM +6.0%, YoY -3.0%)

o Machine Tool Production(January~June, 2015) ￦18,254B(YoY +8.1%)

 

☐ (Exports, May, '15) $176M(MoM -39.2%, YoY -6.8%)

o Sub total of Exports (Jan.~May, '15) $954M(YoY +11.2%)

- By Region

Asia($417M, +9.3%), North America($158M, -9.2%), Europe($200M, -14.2%)

Central and South America($152M, +269.0%)

*ratio of Exports(‘15.Jan.~May) by region : Asia(43.7%), Europe(21.0%),

North America(16.6%), Central and South America(15.9%)

 

☐ (Imports, May, '15)$126M(MoM +3.5%, YoY -34.8%)

o Sub total of Imports (Jan.~May, '15) $592M(YoY -3.9%)

- Asia($417M, +9.3%), North America($158M, -9.2%), Europe($200M, -14.2%)

Central and South America($152M, +269.0%)

 

 

 

2. Korea-EU to Cooperate on 90 Billion Won Projects in Nano, Bio, Energy, ICT

 

 South Korea and the E.U. will conduct a joint research project worth 90 billion won

(US$80 million). Korea is aiming to expand cooperation for the “creative economy” using the E.U.'s capabilities in science technology and research infrastructure. The Ministry of Science, ICT and Future Planning (MSIP) announced that it held a fifth meeting of the EU-Korea joint committee on science technology at the Plaza Hotel in Seoul on June 15, together with the E.U.'s Directorate General of Research and Innovation (DG R&I). The DG R&I is in charge of the European Commission's research and innovation policies and the E.U.’s new research and innovation program called “Horizon 2020.” Lee Suk-joon, the first vice minister at the MSIP, and Robert-Jan Smits, Director-General of DG R&I, attended the event as the head of each delegation. The details of the joint research program, including the budget, was fully fleshed out at the meeting, and is expected to start this or next year. By area, 65.5 billion won (US$58.6 million) will be invested in nanotech, 5 billion won (US$4.5 million) in biotech, 4 billion won (US$3.6 million) in energy, and 15 billion won (US$13.4 million) in the ICT sectors.

 

 

source : http://www.businesskorea.co.kr/article/11049/joint-research-korea-eu-cooperate-90-billion-won-projects-nano-bio-energy-ict#sthash.GvN3mGFw.dpuf

 

 3. Korean Gov't to Invest 100 Billion Won in IoT Testbed Projects

 

SEOUL, SOUTH KOREA
25 June 2015 - 1:15pm
Jung Suk-yee

 

 

 

 

 The Ministry of Science, ICT and Future Planning (MSIP) has decided to pursue testbed projects in the category of the Internet of Things (IoT) with a more than 100 billion won (US$90 million) investment. The MSIP announced that it held a meeting to report the initiation of IoT testbed projects at its global R&D center near Seoul on June 24. The projects are aimed to create results in the “creative economy,” as part of the three year plan for K-ICT strategy and economic innovation. IoT testbed projects are large-scale projects designed to lead the growth of the convergence market by fusing IoT infrastructure and technology in such core areas as autos, health care, energy, urban life, and factories, and to facilitate the development and earlier commercialization of new products and services. The government agency is going to start seven IoT testbed projects – two projects to build 2 testbed research complexes and five convergence testbed projects – with an investment of 108.5 billion won (US$97 million) over the next three years, including 33.7 billion won (US$30.4 million) in 2015. 

SOURCE : http://www.businesskorea.co.kr/article/11176/internet-govt-things-korean-govt-invest-100-billion-won-iot-testbed-projects#sthash.PvOqoy0U.dpuf



 

 4. Korean Tech Firms Bet Big on Smart Heath Care

 

 

 

Wednesday, June 10th, 2015

By Monica Youn-soo Chung (monica@koreaittimes.com)

 Korean tech firms including Samsung Electronics are ramping up efforts to take the lead in digital health care market by joining hands with medical centers.

However, the growth is still slow due to burdensome regulations and lack of infrastructure.
The Korea Health Industry Development Institute estimated that around 12 million people in their 20s to 60s used smart health care service last year in Korea, and the local market reached 3 trillion won. The global digital healthcare-related market is expected to surge to $26 billion by 2017, up from $2.5 billion in 2013, according to the latest report by the state-run Korea Institute for Industrial Economics & Trade.

Among Korean tech firms, Samsung Electronics is the most passionate in the digital health care market. Since the smartphone giant announced its “Vision 2020” in 2009, it has continued to concentrate on developing U-health care and medical devices. Last May, it announced “Samsung Digital Health Initiative” in San Francisco and unveiled SAMI (Samsung Architecture for Multimodal Interactions), an open data platform gathering and analyzing bio information and also launched Simband, a health tracking gadget.

Samsung said it would ramp up efforts on the research and development on analyzing health care data linked to SAMI and Simband in partnership with medical centers.
Samsung’s rival LG Electronics also unveiled its wearable heath care device LG Lifeband Touch, which is currently selling in the U.S. market. The new fitness band is a battery-powered smartwatch-type device that users wear around their wrist to monitor the number of calories they’re burning each day. It also rolled-out earphones measuring users’ heart rate while working out.

Korea’s telecom operators SKT, KT and LG Uplus are also boosting efforts to create revenue from the medical market by capitalizing on their ICT technical know-how. The nation’s two largest carriers SKT and KT already teamed up with Korea’s top hospitals, and created joint ventures Health Connect and Hooh Health Care respectively.
Health Connect is targeting business-to-consumer market based on its Health-On, a mobile-based health management service while Hooh Health is focusing on business-to-business such as integrated medical information system solution and e-MarketPlace.
Two companies haven’t shown any tangible performance last year but they plan to continue the research and development this year.

Korea’s third largest mobile carrier LG Uplus teamed up with Jaseng Hospital of Korean Medicine, the first time for the hospital of Korean medicine to partner with a telecom company. Two organizations are expected to unveil smart health care IoT solution for spine health this year.

Apart from tech firms, Korea’s large hospitals also joined the digital health care services. Some hospitals already unveiled mobile apps which let users make reservation and check results. Konkuk University Medical Center has run its smart U-health care system since 2010 and Seoul Paik Hospital made Health Avatar Beans, an app to manage blood dialysis, allowing patients to more efficiently manage their medical information.

However, some analysts say more relaxed regulations are necessary for the development of smart health care development. For the technologies and services centering on smart health care, there are too many rules and regulations, according to the Korea Health Industry Development Institute.

In South Korea, telemedicine is still illegal. The revision bill allowing telemedicine was sent to the National Assembly but never passed due to the strong opposition from doctors. One tech company developed telemedicine service for chronic diabetes patients for a decade, but it was disappeared on the market due to the lack of relevant laws and infrastructure.
The prohibition to make investment in hospitals is another factor, which drags the industry behind. “Though smart healthcare services such as telemedicine require a long-term investment and clinical demonstration, the development is not active due to the prohibition of investment,” a market observer said.

 SOURCE : http://www.koreaittimes.com/story/50476/korean-tech-firms-bet-big-smart-heath-care

 

[KMTI ⑬] Procedures to Induce Global Enterprise HQs

Simplifying Procedures to Induce Global Enterprise HQs 

The Korean government announced its 'Foreign Investment Activation Plan' with the intent to enhance the foreign investment scale and level one stage further.

The plan highlights expanded inducement of foreign capital in the high value-added services sector, including regional headquarters and R&D centers of global enterprises.

The plan is drawing keen attention from the perspective that it is 'Economic Innovation Countermeasure No. 1' since President Park Geun-Hye revealed her initiative to promote a '3-Year Economic Innovation Plan' at her New Year press conference on January 6.

On January 9, the Ministry of Trade, Industry and Energy announced the 'Foreign Investment Activation Plan' during a luncheon roundtable meeting with foreign-invested enterprises at Cheong Wa Dae. Chairmen of foreign chambers of commerce & industry in Korea, 25 CEOs of leading foreign-invested enterprises and ministers and vice ministers of related ministries, including Trade, Industry & Energy Minister Yoon Sang-Jick, participated in the meeting.

Under the plan, the government decided to promote inducement of high value-added investments, including headquarters and R&D centers of global enterprises, in advance, with a focus on inducing global headquarters of multinational companies having capabilities to create comparatively higher added value.

To that effect, the government decided to apply a 17% flat tax rate for foreign executives and employees working at the headquarters, regardless of their incomes, and also to extend the 50% income tax exemption for foreign engineers working at foreign-invested R&D centers, which was scheduled to expire at the end of this year, until 2018.

Furthermore, the government plans to introduce a prior adjustment system that discusses proper price ranges with joint participation of the National Tax Service and the Korea Customs Service and significantly simplify the taxation system, which is being pointed out as the biggest area of difficulty in domestic management of headquarters, as well.

The government also plans to extend the period of foreign-investment visas to a maximum of five years and the period of stay granted for executives and employees of headquarters to a maximum of five years from the present 1~3 years.

[KMTI ➈] Forecast of Steel Industry

Steel Industry Forecast to Grow
After 4 Years of Stagnation

According to the World Steel Association (WSA), global steel demand in 2014 is expected to reach 1.52 billion tons, up 3.3% from 1.47 billion tons in 2013 and up 6.3% from 1.43 billion tons in 2012.

An executive in charge of business operations at a Korean steel company said, 'Despite a slowdown in the growth of steel demand in the Chinese market, demand will increase significantly this year in other regions like the Middle East and Latin America."

It is also a positive factor that the Chinese steel industry is apparently just 'catching its breath,' as a hot wind of restructuring is blowing through the Chinese steel industry, which has brought an excess of supply to the global steel market with a low-price offensive. To resolve

the supply excess, the Chinese Ministry of Industry and Information Technology recently announced that it will accelerate M&As among steel companies.

The Japanese market situation is not in bad shape either for the domestic steel industry. At present, Japan's representative blast-furnace mills are appraised as lacking sufficient capacity for exports. To address this shortcoming, they plan to modify or repair furnaces one after the other. Nippon Steel Sumitomo Metals, POSCO's strongest competitor, is scheduled to repair Furnace #4 at its Yawata Steel Works from end January to end April this year. Another competitor, JFE Steel, also plans to repair its thick plate and rolling mills in Kurashiki, western Japan, until March this year.

[KMTI ➇] Korea's General '14 Machinery Exports

Korea's General '14 Machinery Exports 
Seen to Cross the US$50 Bil. Level

Korea's exports of general machinery in 2013 were estimated at US$47.6 billion, generating a trade surplus of US$13.2 billion for the sector, according to the Korea Association of Machinery Industry (KOAMI).

The association put forward the optimistic projection that exports of general machinery would increase 8.7% year-on-year and post US$51.6 billion in 2014.

First of all, facility investment is expected to expand, led by largescale plants, with the flow of the domestic economic conditions improving. The projection that overseas demand for machinery may rise to a certain extent also is a favorable factor. Of particular note, the move of manufacturers in the U.S., and other advanced countries toward 'Reshoring' - relocating their overseas production facilities back to their own countries - is expected to drive export growth.

It is noteworthy that, recently, newly emerging countries, including China and ASEAN countries, are increasing imports of machinery. However, the fact that the price competitiveness of Korean machinery is declining compared with Japanese products due to the weaker Japanese yen continuing since 2013 and a persisting slowdown of the Middle East economy may serve as negative factors for Korea's exports.

[KMTI ➆] The Facility investment by manufacturing businesses in 2014

Korean Mfg. Facility Investment Seen at ￦72.6 Tril. in 2014

The Facility investment by manufacturing businesses in 2014 is projected to expand 1.6% year-on-year to 72.6 trillion won, which would account for 53.3% of the nation's total facility investment.

In terms of facility investment scale by business type, investment in electronic parts, computers and video & acoustic communications topped all sectors with 36.9 trillion won (ratio: 27.1%), followed by automobiles at 6.7 trillion won (5.0%), chemical products at 6.1 trillion won (4.5%) and primary metals at 5.6 trillion won (4.1%).

Whereas expansion of facility investment in 2014 is expected in the 'electronic parts, computers and video & acoustic communications,' 'automobiles' and 'oil refining,' facility investment is likely to decrease in 'chemical products' and 'primary metals.'

- Facility investment in the 'electronic parts, computers and video & acoustic communications,' accounting for the largest amount of investment among manufacturing businesses, will grow 5.1% year-on-year in 2014 due to projected investment expansion in semiconductors, electronic parts, etc.

- Facility investment in the automotive sector is expected to grow 8.5% year-on-year in 2014 because automakers have plans to develop new cars and expand factory facilities and because certain investment projects originally scheduled for 2013 were carried over to this year.

- Oil refining businesses are expected to increase investment by 6.8% year-on-year as investment for advancement of oil refining facilities is planned and large-scale expansion of production facilities will continue in 2014, building on last year, to prepare for growth in the Chinese petrochemical market.

In terms of investment growth rates, the 'other transport equipment' sector is expected to record the sharpest investment growth (21.6%).

- This projection reflects investment expansion in railroads, aircraft and other transport equipment-related businesses and the carry-over effects of investments which were not implemented in 2013 by shipbuilding enterprises due to a persisting business recession.

The business types that are expected to pursue facility investment growth for the second consecutive year are 'automobiles,' 'oil refining,' 'mechanical equipment,' 'rubber & plastics' and 'pharmaceutical products.'

- In contrast, the business types projected to experience investment declines for the second consecutive year are 'chemical products' and 'primary metals.'

- The business types forecast to increase investments this year despite investment declines in 2013 are 'electronic parts, computers, video & acoustic communications' and 'other transport equipment.'

[KMTS ➅] Korea Automobile Production & Exports in 2013

Korean Car Export Amount Hits New Peak at US$48.7 Bil.

The Ministry of Trade, Industry and Energy (Minister Yoon Sang-jick) has announced that based on the preliminary estimates, production of cars decreased by 0.9%, and exports and domestic sales decreased by 2.7% and 0.3%, respectively, in 2013.

The production volume was 4,521,638 units in 2013, a year-on-year decrease of 0.9% and a second consecutive year of declining production, due to major manufacturers’ closing on weekends and partial strikes, which have caused a production loss of 200,000 units, coupled with poor sales.

The export volume for 2013 was 3,086,394 units, a year-on-year decrease of 2.7%, and recorded a decline for the first time in four years since 2009 due to the high won and low yen trend, expanded global uncertainties and supply problems of major manufacturers. Nevertheless, the export amount of finished cars (based on MTI 741) reached a record-high level of USD 48.7 billion with a year-on-year increase of 3.1%, thanks to growth in the market share of large passenger vehicles and RVs.

By region, exports of Korean cars were robust in the US market, which has shown a stable economic recovery, and grew in the EU and in Asia, reflecting the economic growth. However, exports declined in Latin America and Eastern Europe due to expanding local production. In China, which accounts for half of all exports to Asia, exports grew by 13.2%, prompted by growing demand caused by the urbanization of inland regions.

By vehicle type, light vehicles with high fuel efficiency thrived due to global economic uncertainties, while large vehicles grew thanks to an improvement in the brand image of Korean cars. SUVs and CDVs have also recorded growth as global demand has grown. Mid-sized and small-sized vehicles decreased as Japanese manufacturers recovered their competitiveness and adopted an aggressive sales promotion strategy, making the most of the low yen.

2013 domestic sales was 1,537,590 units, showing a slight year-on-year decrease of 0.3% and a second consecutive year of decline, due to delays in the economic recovery and advance demands in the 4th quarter of 2012 prompted by individual consumption tax cuts. Despite the launch of popular new SUVs and CDVs, the growing demand for light commercial vehicles and active marketing from the industry, mid-sized, light and small-sized vehicles have seen a decline due to the overall market demand decline and the aging of key models.

Sales of imported cars was 156,497 units with year-on-year growth of 19.6% as diverse new vehicles with a focus on the below-2,000cc class were launched and demand among consumers in their 20s and 30s grew. Over 10,000 units were sold monthly throughout the year.

Meanwhile, the domestic automobile market increased production by 4.3%, exports by 4.5% and domestic sales by △6.9% in December 2013, compared to the same month in the previous year.

[KMTI ➂] Korean machine tool production in 2013

Korean Machine Tool Production Hits US$5.81 Tril.

Korean machine tool production in 2013 is estimated to have declined 9.6% year-on-year, recording 5.81 trillion won, due to the continuation of uncertainties in internal and external economic environments. Affected by a slowdown in domestic facility investment and export decline to major overseas markets, Korean machine tool production suffered a reduction for the first time in four years since the 2009 U.S. financial crisis triggered by the collapse of Lehman Brothers.

Based on KOMMA member company data, machine tool production from January to October 2013 decreased 12.8% year-on-year to about 2.62 trillion won and shipments also decreased 12.8% year-on-year.

In particular, production of three key items - NC lathes (-6.9%), machining centers (-6.6%) and presses (-15.9%) - in the first 10 months of 2013 posted a year-on-year decline of 8.0%.