Outperforming the market through sustainable investment, responsible investment: the case of Korea
Investment in korea presentation
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Transcript of Investment in korea presentation
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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
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OVERVIEW OF THE
ECONOMY
1.Domestic Economy
2. Export and Import
3. Fields of Industry
i. Steel
ii. Electronic
iii. Automobile
iv. Shipbuilding
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OVERVIEW
Domestic economy
Statistic
Jan/ 2011
Interest rate 2.75%
Inflation rate 3.5%
Unemloyment rate 3.7%
Growth rate 0.50%
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OVERVIEW
Export and Import
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KOREA’S BALANCE OF TRADE
Export $44340.0 million
Import $40600.0 million
OVERVIEW
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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
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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
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• 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
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INVESTING
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HARDWARE
- Advantage location
- Infrastructure
- Developed ship-building
- industry
SOFTWARE
- Educated labor force
- Supporting policies
- Up-coming industry
- Low operating cost
INTERNAL
ADVANTAGES
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Busan port
Jinhae Free Economic Zone
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INCHEON AIRPORT
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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
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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
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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
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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
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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
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INVESTING – HOW TO?
Notification Capital remittance
Registration
Paid-in Capital transfer
FDI company registration
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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%
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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
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THE END