KITA(Korea International Trade Association) News

 

ASEAN Economic Community to Embark Next Year Opening a $ 2 Trillion Single Market


-KITA held 2014 Vietnam and Myanmar Trade Investment Fair-

Korean companies are moving fast towards ASEAN region. The company L, who produces mobile phone cases and leather bags, is struggling with the increase of production costs as well as the strengthened government’s regulations in China. Therefore, the company is currently conducting the field research in Myanmar to move into. The company S, who manufactures PVC hoses for agriculture, is in a rush to move into the agriculture country Myanmar believing that the demand for agricultural hoses will surge in the domestic market.

The Korea International Trade Association (Chairman, Han Duck-soo) sent the trade investment delegation to Vietnam and Myanmar for four days from November 12th. The delegation held the trade investment meetings at Ho Chi Minh in Vietnam on 12th. On 14th, they moved to Yangon in Myanmar where the ASEAN+3 summit meeting took place and continued business meetings. This ASEAN+3 talks will be an opportunity to accelerate the trade invigoration as well as investment via tariff elimination of each country in ASEAN.

Around one hundred companies took part in the fair in Ho Chi Minh and showed great interests in Korean products. Particularly in this fair, there were many active business meetings on cosmetics, packaging production facilities, red ginseng and diet foods.

Seo Gang-in, CEO of Seoju Engineering, a packaging production machinery company, said “Vietnam is the third largest instant noodle consumption market following South Korea and Indonesia and has a great potential for growth in the future.” He also expressed confidence by saying “We will dominate the Vietnamese market with the production technology that we have acuminated over the last 26 years.”


Pham Than Hai, a sourcing manager of the general trading company Haimi International, who mainly deals with Korean products explained “In Vietnam, since people think Korean products are guaranteed for high quality at a reasonable price, it is critical to secure the exclusive right to sell Korean products in Vietnam.”

As of last year, Myanmar’s national income per capita was only 870 dollars. However, the investment of foreign companies in the mineral resources sector has surged since Myanmar opened its economy in 2012 and the country is also spotlighted as the processing trade base for consumer goods such as textile due to the low labor costs.

Korean companies who participated in this delegation were not only interested in the entry of their products into the local markets but also the investment in the country. Therefore, they planned to visit Mingaladon Industrial Park in Myanmar to check the local investment conditions.

Jang Ho-geun, head of International Marketing Group of KITA said “When ASEAN Economic Community embarks in 2015, there will be a huge single market worth of over 2 trillion dollars. Therefore, Korean companies need to do their endeavors to make inroads into the market.” He also elaborated “In the case of Myanmar, it is a competitive place for a manufacturing base as it only costs 1,100 dollars per year to hire a line worker, which is the lowest in ASEAN countries.”

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