[One Week of Cargo Solidarity Strike] Semiconductor Raw Material Supply Disruption... Cement Industry Faces Shutdown Crisis

Samsung Electronics Supplier Lockdown Attempt
Most Ready-Mix Concrete Companies Shut Down
Alcohol Companies Also Suffering Delivery Disruptions

[Image source=Yonhap News]

[Asia Economy Reporters Oh Hyung-gil, Kim Jong-hwa, Song Seung-yoon] As the Cargo Solidarity strike surpasses one week, the nation's economic logistics lifeline has come to a complete halt. The entire industrial sector is being devastated by all-around impacts, affecting not only finished products but also raw materials and components.

While corporate damages are snowballing, the Cargo Solidarity appears to be intensifying its efforts. As negotiations with the government have reached a deadlock, they are targeting specific companies to strengthen their bargaining power. The targeted companies are in a critical state where delays in delivery have forced them to halt factory operations.

Production Halt Crisis as Industrial Logistics Stop

According to the industry on the 13th, Samsung Electronics' Gwangju plant is experiencing delays in shipping home appliances such as refrigerators and air conditioners due to Cargo Solidarity restricting entry vehicles. In LG Electronics' case, products manufactured overseas and imported into Korea are stuck at ports due to the strike. An industry official said, "If the situation prolongs, there is concern about delivery delays to consumers."

LS Nikko Copper and Korea Zinc, which supply high-purity sulfuric acid used in semiconductor manufacturing to Samsung Electronics, are busy preparing countermeasures. High-purity sulfuric acid is an essential raw material used for cleaning silicon wafers in semiconductor production, and any disruption in its supply inevitably impacts semiconductor manufacturing.

Earlier, on the 9th, the Cargo Solidarity Ulsan branch attempted to blockade the logistics of these companies' Ulsan plants. Although union members withdrew without major incidents due to police intervention, another blockade attempt is expected in the future.

Petrochemical and refining companies are also facing situations where they must halt factories due to interruptions in raw material supply needed for refining processes or accumulation of product inventories. Petrochemical companies in the Ulsan and Yeosu industrial complexes are complaining about damages caused by the Cargo Solidarity strike at a time when the previously soaring naphtha prices have finally stabilized.

Refining companies are not directly affected by the strike since there are no union members from the Korean Confederation of Trade Unions among the transport companies supplying petroleum products. However, because petrochemical plants and production facilities are closely connected, damage from factory shutdowns across the entire industrial complex is inevitable.

Due to the nature of refining and petrochemical facilities, if production stops, petrochemical products inside the equipment harden and must be removed, requiring considerable time for restart. Additionally, the risk of accidents increases during the restart and equipment inspection processes.

[Image source=Yonhap News]

Cement Shipments Halted... Soju and Water Supplies Drying Up

The cement and ready-mixed concrete industries are on the verge of shutdown. Cement shipments were completely halted the previous day. During peak seasons and holidays, about 10,000 tons of cement were shipped daily on average, but shipments stopped entirely that day.

Major ready-mixed concrete companies have stopped operations at all plants except one or two with remaining cement stock starting that day. Following Sampo Industry and Aju Industry, which already stopped all plants last week, Eugene Corporation also ceased operations at most plants that were running until last week due to depleted cement stock. The industry estimates that only one or two regional plants with remaining stock are still operating.

The accumulated cement stock due to halted shipments is also problematic. As of that morning, total stock increased to 1.14 million tons, including 490,000 tons at production plants and 650,000 tons at distribution bases, pushing the industry toward halting cement production.

An industry official said, "If the Cargo Solidarity strike does not end, we will have no choice but to consider partial shutdowns of cement production facilities within days," adding, "Currently, cement supply interruptions have caused most ready-mixed concrete plants nationwide to stop shipments, and a construction site crisis is unavoidable starting next week."

[Image source=Yonhap News]

In the liquor industry, Hite Jinro, which first experienced delivery disruptions, is currently shipping less than 50% of its usual product volume. Although they plan to maximize shipments by contracting with other logistics companies, the situation is not improving easily.

OB Beer’s beer shipments have dropped to about 20% of normal levels. They intend to recover to about half by mobilizing substitute vehicles as much as possible, but normalization is expected to take time. Jeju Samdasoo water was once blocked from being transported from Jeju Port to the mainland. Although the blockade has been lifted and transportation resumed, the Cargo Solidarity strike in the Mokpo area has reduced Samdasoo shipments to the Seoul metropolitan area. As of that day, Samdasoo supply was at 30-40% of usual levels.

Other bottled water manufacturers such as Nongshim, Lotte Chilsung Beverage, and Dongwon F&B currently report no supply disruptions but are closely monitoring the situation in case the strike prolongs. Samyang Foods proactively prepared for the strike by shipping contracted volumes in advance before the strike began.

This content was produced with the assistance of AI translation services.