investment in korea presentation
TRANSCRIPT
INTRODUCTION
Korea’s economy is the 15th largest economy in the world by
GDP, after the world’s financial-economic crisis in 1997
Fast growing, solid long-term policy, stable economy
Educated labor force
Advantage in location
High export and import rate
OVERVIEW OF THE
ECONOMY
1.Domestic Economy
2. Export and Import
3. Fields of Industry
i. Steel
ii. Electronic
iii. Automobile
iv. Shipbuilding
OVERVIEW
Domestic economy
Statistic
Jan/ 2011
Interest rate 2.75%
Inflation rate 3.5%
Unemloyment rate 3.7%
Growth rate 0.50%
OVERVIEW
Export and Import
KOREA’S BALANCE OF TRADE
Export $44340.0 million
Import $40600.0 million
OVERVIEW
i. Steel
6th largest steel producer world-wide
High domestic demand
ii. Electronic
High growth rate in 20th century
Decline later due to competitive pressures from Japan and South-East Asia
iii. Automobile
World largest producer
One of most important industries to promote export
iv. Shipbuilding
World leader
Developing additional services – oil supertankers, oil drilling platform, etc.
OVERVIEW
INDUSTRIES
ENVIRONMENT
• Foreign investors will have accesses to invest in
virtually all types of business in Korea
• Potential foreign investors only have to ‘notify’ the
relevant government authorities rather than to
‘seek’ for a consent.
Foreign Investment Promotion Act
• 1,148 industrial sectors, only 31 sectors remain closed
• 7% appreciation in 2010 to over $10 billion
• Tight monetary policy to curb hot money inflows and foster financial system
stability
ENVIRONMENT
INVESTING
HARDWARE
- Advantage location
- Infrastructure
- Developed ship-building
- industry
SOFTWARE
- Educated labor force
- Supporting policies
- Up-coming industry
- Low operating cost
INTERNAL
ADVANTAGES
Busan port
Jinhae Free Economic Zone
INCHEON AIRPORT
EXTERNAL
FACTORS
Globalisation
- World new economic trend
- Economic organizations member: APEC, AFTA + 3
- Emerging of logistic markets
0
50
100
150
200
250
300
350
Korea China Japan Singapore Hongkong Taiwan
$ billion
COMPETITORS
ANALYSIS
• China
Strengths: cheap labor force, large market, high purchasing power
Weaknesses: tight policies and information censors, high corruption rate
• Taiwan
Strengths: developed information technology
Weaknesses: political risk
• Japan
Strengths: advantage locations, reliable labor force
Weaknesses: elderly populations
SUPPORTING REGULATION & POLICIES
- Free economic zones
- Tax break: 7 years tax break in 2009 for free economic zone
- Open policy
- Vision: 2020 global logistic powerhouse –
To create power health throw logistic industry
Build and update hardware infrastructures
Strengthen software oriented logistics systems
Activate the logistic industry
Establish national logistics base system
SWOT ANALYSIS
Strengths
-Well equiped facilities and educated
labor force
- Highly supporting policy
- Geography advantage
- Developed shipbuilding industry
- Strong legal system
- Low rate of risks
Opportunities
-Asian high growth rate lead to high
growth
rate of demand for logistic services
-Shift of industry – from large
enterprises
to third-party logistic firms.
- Government supporting policies
- AFTA +3 and APEC members
Weaknesses
- Number of competitors in North East
Asia
Cost of operating due to high exchange
rate
High rate of domestic enterprise
protections
Threats
War and natural disasters
OPERATING AND SETTING NETWORK
- Setting transportation and supply network:
warehouse, port, airport, etc.,
- Purchase freight vehicles, vessels and air-crafts.
- Build-up technology and information center
- Corporate with others logistic firms to set up the network
Services:
- Offer trans-pacific flight and shipment
- Provide storage facilities and bounded-ware houses
- Provide urgently shipment between East Asia and America
Receive Storage Send out
INVESTING – HOW TO?
Notification Capital remittance
Registration
Paid-in Capital transfer
FDI company registration
FINANCIAL EXPECTANCY
0
5000
10000
15000
20000
25000
30000
35000
1st year 2nd year 3rd year 4th year 5th year
Sales revenue
Expenses
Net income
Growth rate approximate: 8.7%
Growth rate in 4 years:
43.8%
NET PRESENT VALUE
Million Bath
Year0 1 2 3 4 5
(200)
108
125
114
99
84
Total: 530 million ThB
NPV: 330 million ThB
THE END