SEOUL, Aug. 23 (Korea Bizwire) — Nearly half of South Korea’s smaller exporters with offshore production facilities are considering expanding overseas output, with only a small portion weighing reshoring, a poll said Wednesday.
The survey of 1,015 small and mid-size export companies showed 49.1 percent of the respondents planning to scale up overseas production or establish new production hubs.
Only 4.7 percent replied they are mulling moving overseas manufacturing facilities back home, with 39.2 percent being standpatters, showed the poll taken by the Korea International Trade Association (KITA).
About 45 percent of the firms planning on expansion cited cost-cutting as the top reason, followed by a quick response to changes in local markets with 34.5 percent.
Slightly over 33 percent said they plan to expand facilities in Vietnam, trailed by China with 19 percent, members of the Association of Southeast Asian Nations (ASEAN) with 10.7 percent, Indonesia with 9.5 percent and India with 8.3 percent.
The companies said they are less competitive than leading rivals in key export markets due to insufficient marketing and sales activities, despite competitive edges in quality, design and service.
The survey also showed about 48 percent of the respondents investing 10 percent or more of their sales in research and development, with nearly 65 percent planning to expand investment.
KITA called on the government to come up with measures, including more incentives, to encourage those companies to move their manufacturing facilities back home in order to help revive the Korean economy and create more jobs.