WorldCity, Annual Report: No. 4 South Korea- Vehicle, textile imports soar | Connecting Local Business Leaders To The Global Economy

Annual Report: No. 4 South Korea- Vehicle, textile imports soar

June 25th, 2006

Triple-digit import growth among key products boosted South Korea’s trade relationship with Georgia.

Cars and trucks are driving South Korea’s trade with Georgia.

Vehicles made up more than 40 percent of the $4.1 billion in overall trade that the state posted with South Korea in 2005. Georgia imported $1.7 billion in vehicles from the Asian nation, a 3.4 percent jump from a year earlier.

Although the value of car imports rose, the percentage increase for auto parts was the most notable. The Savannah Customs District imported nearly $156 million in auto parts in 2005 – a 425 percent jump from 2004.

South Korean automakers Hyundai and Kia import through the auto terminal on Colonel’s Island in Brunswick, south of Savannah. Hyundai, the parent company for Kia Motors since 1997, has been shipping cars through Brunswick for 16 years.

But the new Kia assembly plant slated to break ground in West Point, Ga., this year is expected to cut into the imports. Jong-Soo Ok, a director for the Korea Trade Center in the U.S. Southeast, said the imports will hold steady in the near term but could decline as Kia begins outsourcing from auto part makers in the United States.

Savannah also imported $154 million-worth of bulldozers and excavators, compared to $151 million in 2004. While U.S. purchases of construction machinery held steady, imports of transmission devices for cell phones decreased 36 percent to $109 million.

Polyesters, Georgia’s sixth most important import from South Korea, rose 133 percent to close the year at nearly $41 million. The increase comes at a time when South Korea’s textile sector faces stiff competition from China, where wages are lower. South Korea has begun developing heavy polyester textiles in a bid to carve a niche market untouched by its bigger neighbor.

But local investment in Georgia’s textile industry promises to offset some of the import focus of the sector. For example, SKC America, the U.S. subsidiary of South Korean polyester manufacturer SKC Co., is considering investing $400 million in its North American headquarters, which is located in Covington.

Georgia’s exports to the Asian country, meanwhile, were highlighted by $140 million in regional jet part exports, up more than 10 percent from $127 million in 2004.

Chris Clark, the Georgia Economic Development Department’s deputy commissioner of global commerce, said corporate and personal security concerns sparked by the 9/11 terrorist attacks created a market for private jets.

Gulfstream has invested $350 million to double the size of its plant in Savannah.

Optical fibers were the second leading export to South Korea, totaling almost $126 million in 2005, a 15.5 percent increase from a year earlier.

According to the Georgia Department of Economic Development, South Korea has become the state’s fourth most important export market.

Clark said trade with the Asian country surged in 1985 when the Georgia Office of Economic Development opened an office in South Korea. That prompted Korean electronics manufacturer Samsung in late 2005 to open a research and development office in Atlanta. Working in conjunction with the Georgia Institute of Technology, the Samsung Electro-Mechanics design center is developing Radio Frequency Integrated Circuit (RFIC) technology.

The center is expected to become Samsung’s main North American research location.

Although the Savannah Customs District posted a $1.8 billion trade deficit with South Korea in 2005, Georgia has been an important exporter of services. Atlanta developer Portman Holdings, for example, is working on a 151-story commercial building project in the Korean port city of Incheon.