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Polarization between conglomerates and SMEs intensifying due to prolonged pandemic Updated: 2022-05-17 13:20:11 KST

This is one of the biggest foundry sites located in the capital area.
Foundries here create parts and molds for cars, robots, and boats by heating scrap metal.
It requires rigorous labor, but these factories serve as the backbone of the manufacturing sector.
Despite their importance, business owners are having hard time due to the prolonged pandemic and the surge in raw material prices.

"For example, the price of a kilogram of scrap metal has almost doubled, from 4-hundred won to 8-hundred-50 won.
But the price of cast-iron products which we produce has not risen that much."

Output at these facilities has also fallen, with the average level of production at small to medium sized manufacturing businesses in March at 68.4 percent.
The level stood above 70 percent pre-pandemic, but after 2019 it has been hovering between 60 to 70 percent for 29 straight months.

"There are multiple reasons why the production level is under 60%.
The biggest reason is because we don't have the staff to work in our factories."

On the other hand, conglomerates with more than 3-hundred employees are showing strong signs of rebounding.
The production index of the manufacturing sector compiled by Statistics Korea rose 17.5 points in March month-on- month, to 1-hundred-30.7.
On the other hand, the figure for SMEs barely topped one-hundred.

"Conglomerates are recovering due to the easing of social distancing measures, but SMEs who have less than 12 billion won of sales, or some 94 million U.S. dollars are still struggling."

Showing this gap is the number of South Korean conglomerates that reached the milestone of 1-trillion won in annual sales.
Last year, a total of 2-hundred-29 companies joined the so-called '1 trillion-won club', a new record for the country.
Song Yoo-jin, Arirang News.
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