Root Industry Sector Urges Prompt Legislation of 'Supply Price Linkage System'

[Asia Economy Reporter Donghyun Choi] The root industry sector has urged the prompt legislation of the delivery price linkage system.

The Korea Federation of Small and Medium Business (Kbiz) held the '2022 2nd Root Industry Committee' on the 25th at the Kbiz headquarters in Yeouido, Seoul. The Root Industry Committee is composed mainly of root companies such as mold, casting, and welding to discuss current issues and prepare customized policy responses.

About 10 representatives of industry-specific cooperatives attended, including Shin Yong-moon, chairman of the Korea Mold Industry Cooperative and committee chairman, Kim Moon-sik, chairman of the Busan Surface Treatment Industry Cooperative, Lee Soo-kyun, chairman of the Busan Gyeongnam Mold Industry Cooperative, and Eun Jong-mok, chairman of the Korea Welding Industry Cooperative. The committee provided a forum to discuss the current issues and challenges faced by root companies recently confronted with management difficulties.

The root industry sector appealed that the delivery price linkage system must be promptly legislated to ensure the survival and management stability of root companies, which have the characteristics of subcontracting industries. According to Kbiz, as of August, exports in the representative root industry of mold manufacturing decreased by more than 17% compared to the same period last year (from $1.52 billion to $1.25 billion). Chronic management difficulties such as funding and manpower shortages in root companies have been exacerbated by the triple burdens of high interest rates, high exchange rates, and high prices.

Kim Ki-moon, chairman of Kbiz, said, “Although government support measures continue, support for root companies still lags behind that of Japan and the United States,” adding, “Short-term survival measures such as funding and manpower, along with comprehensive support measures like the delivery price linkage system to correct the tilted industrial structure, must be prepared simultaneously.”

Shin Yong-moon, chairman of the Root Industry Committee, said, “The root industry sector has been hit hard by the global energy crisis and soaring electricity rates,” adding, “To transition to an energy-efficient and low-consumption structure, support measures that root companies can feel, such as replacing aging facilities, must be prepared not only by KEPCO but also by various energy suppliers including gas and power generation companies.”

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