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SMEs

Korean SMEs post record-high exports in H1

More than 20% of South Korean exports in 2021 are projected to come from small- and medium-sized firms

By Jul 21, 2021 (Gmt+09:00)

POMIT conducting smart farm feasibility tests in Kuwait (Courtesy of POMIT)
POMIT conducting smart farm feasibility tests in Kuwait (Courtesy of POMIT)

Korea’s small- and medium-sized enterprises (SMEs) have posted their highest-ever first-half exports this year.

The Ministry of SMEs and Startups said on July 21 that the amount of exports by the country’s SMEs in the first half came in at $56.5 billion, up 21.5% from the same period last year. The number marks the highest figure since the ministry started the survey in 2010.

The ministry and the Korea Trade-Investment Promotion Agency (KOTRA) said that the SMEs' strong performance was largely driven by their continued innovations in products and services.

KOTRA is a state-funded agency that virtually serves as the local office for South Korea’s SMEs abroad. By operating 127 overseas offices in 84 countries, KOTRA conducts market research, holds meetings with local buyers on behalf of the companies, and facilitates other trade-related matters requested by the firms.

KOTRA added that export growth was not fueled by a single industry but rather a range of different industry sectors from cosmetics, digital devices, semiconductor equipment, medical products to food items.

SUCCESS ACROSS INDUSTRIES

The plant operation and maintenance systems developer POMIT Co. entered the Middle Eastern market in 2014 with aims to offer operation and maintenance solutions to power plants in the region.

Despite some early successes through working with local partners, the company in 2020 was hit hard by the COVID-19 pandemic that halted almost all of its projects in the Middle East. The company decided to diversify into the smart farm business based on its proprietary plant operation and maintenance information technology.

With the help of the KOTRA Kuwait Office in feasibility analysis and local networking, POMIT won a $1.72 million deal in April to build vertical farms in Kuwait in consortium with a smart farm company PlanTFarm.

Moreover, RingFree, a startup founded last September by a hairdresser, is leading the export of Korean masks to Japan. The company makes strapless masks for medical and beauty professionals who must wear masks for long periods of time.

RingFree’s patented strapless masks are becoming popular in Japan.
RingFree’s patented strapless masks are becoming popular in Japan.

Having received a patent for its strapless mask, RingFree began exporting its products to Japan after a business consultation with KOTRA. The company’s accumulated overseas sales amount to more than $80,000.  

Some firms that had previously only sold their products in the domestic market are transforming themselves into exporters. Korea’s popcorn market leader M.Popcorn Roastery, which holds more than a 90% share of the domestic market, started exporting its first batches of popcorn last year in the middle of the pandemic, to Singapore.

M.Popcorn Roastery’s premium popcorn products, which use corn from Korea’s Gangwon Province, are twice as expensive as the local products in Singapore but have successfully positioned themselves as healthier alternatives.

M.Popcorn Roastery’s premium popcorn products sold in Singapore
M.Popcorn Roastery’s premium popcorn products sold in Singapore

Trade experts note that the SMEs are projected to make up more than 20% of all exports from South Korean firms this year. The figure was 17.4% in 2018, 18.6% in 2019 and 19.7% in 2020.  

“KOTRA’s role is becoming more important as the pandemic is remaining with us longer than expected. Every single KOTRA employee will put their best effort into supporting our SMEs,” said KOTRA CEO Yu Jeoung-yeol.

Write to Kyung-min Kang and Gyeong-jin Min at kkm1026@hankyung.com

Daniel Cho edited this article.

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