TRADE CONFLICT BETWEEN KOREA + JAPAN A chance for Swiss exporters? - - PowerPoint PPT Presentation

A chance for Swiss exporters? 20.05.2020

WEBINAR TRADE CONFLICT BETWEEN KOREA + JAPAN

INTRODUCTION

JACQUELINE TSCHUMI CONSULTANT JAPAN + SOUTH KOREA SWITZERLAND GLOBAL ENTERPRISE

Partners

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A very warm «Thank you» to our partner

Agenda

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WELCOME BY SWISSMEM

CHRISTOPH BLÄTTLER SECRETARY GENERAL SWISS MACHINE TOOL MANUFATURERS SWISSMEM

8 | Korea: opportunities for Swiss exporters

Downturn – chase opportunities !

Christoph Blättler Secretary SMTM, Head Korea Desk

9 | Korea: opportunities for Swiss exporters

Current direction of MEM-Business

10 | Korea: opportunities for Swiss exporters

Monthly Purchasing Managers Index (industry)

Red = contraction of business

April

Source: FuW, 05.05.2020 https://www.fuw.ch/article/schwindende-hoffnung-fuer-die-konjunktur/ Ineichen Research & Management, Bloomberg, Markit/Grafik: FuW

11 | Korea: opportunities for Swiss exporters

Swiss MEM-Industry exports Jan to Mar 2020

• 10.4%
• 7.0%
• 6.0%
• 11.6%
• 10.0%
• 18.0%
• 4.8%
• 19.5%

0.6%

• 11.1%
• 13.7%
• 12.5%

18.6%

• 2.3%

EU* (56.0%) Asien (17.4%) USA (14.1%) Deutschland (25.6%) China (5.6%) Frankreich (5.1%) Grossbritannien (4.0%) Italien (4.0%) Japan (2.2%) Polen (1.9%) Spanien (1.5%) Indien (1.1%) Russland (1.1%) Brasilien (0.6%)

Share of total MEM exports Change to same period of perceding year

* Without Great Britain

SITUATION IN KOREA: CURRENT OPPORTUNITIES + THREATS

ROGER ZBINDEN HEAD SWISS BUSINESS HUB KOREA

Keyword COVID-19 in Korea

Update on Korea’s dealing with COVID-19

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• Status May 18
• 11’065 total infections (+15)
• 263 deceased (+1)
• 753’211 total tests conducted
• No lockdown
• Strict testing, tracking and isolating

specific clusters to avoid second wave

Status (as of May 18)

Economic Outlook Post-Covid19 (IMF April 2020)

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Country 2020 (%) 2021 (%)

World

• 3.0

5.8 USA

• 5.9

4.7 China 1.2 9.2 Euro Area

• 7.4

4.7 Germany

• 7.0

5.2 Italy

• 9.1

4.8 UK

• 6.5

4.0 France

• 7.2

4.5 Japan

• 5.2

3.0 Korea

• 1.2

3.4

Restriction of Movement of People

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Korea Immigration Service Offers information on the entry to Korea and status on suspension of visa-free entry:

• All incoming Koreans and foreign nationals are

subject to 14-day mandatory quarantine

• If tested positive, they will be sent to either a

hospital or treatment center

• If tested negative, short-term staying travelers

quarantine at facility for 14 days. Long-term staying travelers (including Koreans) must be in self-quarantine, either in their own residence or in a designated facility

http://www.immigration.go.kr/immigration_eng/index.do

Available Flights and useful information (status 18 May) Airlines are flying directly from Incheon airport to Europe at the moment:

• Asiana (Frankfurt)
• British Airways (London): from 1 July, 2020
• Korean Air (London/Paris/Amsterdam/Frankfurt)
• KLM (Amsterdam)
• LOT Polish Airlines (Budapest/Warsaw): from 2

June, 2020

• Lufthansa (FFM, MUC) from 1 June, 2020
• Qatar Airways: via DOHA to most of the

European cities

https://www.eda.admin.ch/countries/korea- republic/en/home/representations/embassy.html

Please be aware that this information can change at any time !

Covid-19 Factsheet Korea

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Download available on https://www.s-ge.com/en/overview/covid-19- information-smes

Keyword Opportunities from the Trade Conflict with Japan in the MEM industries

Trade conflict between Korea and Japan

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Situation Action Japan

• Looming historic and political grievances

between the neighboring countries swapped

• ver last summer to the economic and trade

sphere

• Japan imposes strict export control

measures on 1’194 items (“restricted items”) Countermeasure Korea Impact Study

• Korea defines Hundred Key Items (increase

to 338 on 11 May 2020) and additional MEM items (total 4’708) where dependence from Japanese manufacturers have to be reduced (“key items”)

• Quantitative research identifies 66 specific

MEM items with market opportunities for Swiss MEM manufacturers

Data model applied in report

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Group 2 – 12 Items Restricted key items with a total import ratio of at least 50% of which imports from Japan value at least 30m US$. Group 1 – 13 Items Restricted key items with a total import ratio of at least 50% of which more than 50% is imported from Japan. Group 3 – 7 Items Restricted key items with a total import ratio of less than 50% of which imports from Japan value at least 50m US$. Group 4 – 14 Items Non-restricted key items with a total import ratio of more than 50% of which imports from Japan value at least 40m US$ and show a high increase. Group 5 – 20 Items Additional (mostly non- restricted non-key) MEM items where Japanese manufacturers are ranked in the top 3 and Swiss imports are at least 5 million US$ on average in 2017-2019 (Chapter 4 of report).

PRESENTATION OF THE REPORT: OPPORTUNITIES FOR THE SWISS MEM INDUSTRY

MIN-SEO KANG TRADE OFFICER SWISS BUSINESS HUB KOREA

How to use the report

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Phase I

Identify your product

Phase II

Look for Strategy

Phase III

Elaborate your Strategy

How to use the report

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Identify your product Look for Strategy Elaborate your Strategy

• All items are indicated in HS

Codes

• For all of the 66 items we

tried to give ➢ Market flash (product description, size, statistics) ➢ Names of Japanese and global competitors to Swiss MEM manufacturers (where available)

• In chapter 5 the report indicates

➢ Several generic market entry and market expansion strategies ➢ Short case studies

• Gain additional information for an

informed decision how to enter the market or how to improve your market activity in Korea with S-GE and SBHK

Phase: Desc:

MEM Opportunities in Korea

FOCUS REPORT

Example 1

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f8545110000 Market Flash

• Carbon electrodes, carbon brushes, lamp carbons, battery carbons and
• ther articles of graphite or other carbon, with or without metal, of a kind

used for electrical purposes

• The global market for Ceramin Matrix Composite is estimated to grow

from 2019 to 2029 at a rate of 9.5% CAGR. The market volume in 2019 was $9,400M and is expected to grow to $23,300M. Growth in this category is led by the aerospace and defense market. Description Market Flash Import

Imports

• Mil. $

2017 144.5 2018 470.9 2019(3Q) 391.3

Country (2018) Balance (M.$) Export (M.$) Import (M.$) Japan (231.6) 0.0 231.6 China (154.6) 1.5 156.1 India (43.4) 0.0 43.4 Spain (23.1) 0.0 23.1 France (16.4) 0.0 16.4

Example 2

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f9022192000 Market Flash

• Apparatus based on the use of X-rays or of alpha, beta or gamma

radiations, whether or not for medical, surgical, dental or veterinary uses, incl. radiography or radiotherapy apparatus, X-ray tubes and other X-ray generators, high tension generators, control panels and desks, screens, examination or treatment tables, chairs etc.

• The size of the X-ray apparatus system market in 2016 was $545M.

The market is expected to grow between 2017 and 2023 at a rate of 6.51% CAGR to a value of $868M. Description Market Flash Import

Imports

• Mil. $

2017 104.5 2018 105.1 2019(3Q) 52.7

Country (2018) Balance (M.$) Export (M.$) Import (M.$) Japan (52.9) 0.6 53.5 USA (19.8) 0.7 20.5 Germany (12.1) 0.4 12.5 Israel (6.7) 0.0 6.7 UK (5.4) 0.0 5.4

Example 3

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f8456 Market Flash

• Machine-tools for working any material by removal of material, by laser
• r other light or photon beam, ultrasonic, electro-discharge, electro-

chemical, electron beam, ionic-beam or plasma arc processes; water-jet cutting machines

• Domestic production: 574,202
• Exports: 240,999
• Imports: 337,817

Description Market Size Import 96 Manufacturers 9 Importers Market Size: 671,020

RANK Import country

• Imp. value (2017)
• Imp. value (2018)
• Imp. value (J-N 2019)

1 Japan 109,549 124,415 80,338 (▼) 2 China 40,646 53,993 65,997(▲) 3 Switzerland 74,334 60,193 31,848 (▼) 4 Germany 43,337 36,390 18,384(▼) 5 Thailand 12,019 12,347 7,655(▼) Total 380,478 337,817 236,130 (▼)

Unit: 1000 USD

Example 4

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f850110 Market Flash

• Motors of an output not exceeding 37.5W

(Low Capacity Motors)

• Domestic production: 1,988,211
• Exports: 352,383
• Imports: 758,289

Description Market Size Import Monthly Statistics (%)

Apr 2019 – Jan-Mar 2020 85 Manufacturers 27 Importers

Market Size: 2,394,117

RANK Import country

• Imp. value (2017)
• Imp. value (2018)
• Imp. value (J-N 2019)

1 China 565,721 424,399 360,856 (▼) 2 Philippines 109,313 110,307 68,269(▼) 3 Vietnam 68,749 80,901 58,161(▼) 4 Japan 113,015 50,391 42,134 (▼) 5 Switzerland 10,403 15,068 18,471 (▲) Total 939,874 758,289 611,657(▼) Country/Month 4 5 6 7 8 9 10 11 12 1-3 Switzerland 50.1 39.1

• 0.9
• 10.1

76.1 76.1 45.4 52.6 61.0 37.7 Japan 121.0

• 31.0

58.6 26.5

• 39.3

6.2

• 5.2
• 39.2
• 43.7
• 43.9

Unit: 1000 USD Unit: %

Example 5

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f902780 Market Flash

• Instruments and apparatus for physical or chemical analysis, or for

measuring or checking viscosity, porosity, expansion, surface tension or the like, or for measuring or checking quantities of heat, sound or light, n.e.s.

• Domestic production: 774,950
• Exports: 651,368
• Imports: 691,306

Description Market Size Import 163 Manufacturers 24 Importers Market Size: 814,888

RANK Import country

• Imp. value (2017)
• Imp. value (2018)
• Imp. value (J-N 2019)

1 Japan 320,053 327,341 309,965(▼) 2 USA 131,367 142,420 158,774(▲) 3 Germany 53,641 60,718 56,297(▼) 4 China 16,549 31,108 27,716(▼) 5 United Kingdom 25,839 35,993 23,166(▼) 7 Switzerland 23,000 17,992 17,878(▼) Total 651,368 691,306(▲) 685,361(▼)

Unit: 1000 USD

How to use the report

32

Identify your product Look for Strategy Elaborate your Strategy

• All items are indicated in HS

Codes

• For all of the 66 items we tried to

give ➢ Market flash (product description, size, stats) ➢ Names of Japanese and global competitors to Swiss MEM producers (where available)

• Chapter 5 of the report

indicates ➢ Several generic market entry and market expansion strategies ➢ Short case studies

• Gain additional information

for an informed decision how to enter the market or how to improve your market activity in Korea with S-GE and SBHK

Phase: Desc:

MEM Opportunities in Korea

FOCUS REPORT

FROM THE PERSPECTIVE OF A SWISS COMPANY

ROGER MARTI SENIOR MILLING MANAGER ASIA GF MACHINING SOLUTIONS, SOUTH KOREA

Founded +200 years ago

Johann Conrad Fischer 1773-1854 Georg Fischer I 1804-1888 Georg Fischer II 1834-1887 Georg Fischer III 1864-1925

On the Swiss Stock Exchange since 1931

We are industrial pioneers

Georg Fischer Corporation

All about you

GFMS Korea for Swiss Business Hub Korea and Swissmem | Mai 2020

Worldwide for our customers

33

countries

14’678

employees

142

companies

3’720

million (CHF) sales in 2019

To get a balanced global footprint that supports its growth, GF invests in new markets in Asia, the Americas and the rest of the World.

33 15’027 140 4’572

million (CHF) sales in 2018

GF Piping Systems GF Machining Solutions GF Casting Solutions

GF Machining Solutions

972

million (CHF) sales* 2019

3’358

employees*

1'066

million (CHF) sales* 2018

3’394

employees* Production plants

8

Centers of Competence

20

Sales Companies

33

Countries

+50

GFMS Korea for Swiss Business Hub Korea and Swissmem | Mai 2020

Liechti Leader in five-axis airfoil machining solutions for the turbine industry Step-Tec High-end motor Spindles and subassemblies System 3R Productivity-boosting Automation, Tooling and Software systems

Our Technology Brands

AgieCharmilles Wire-cutting, die-sinking and hole- drilling EDM solutions, Additive Manufacturing and Laser texturing Mikron Mill High-speed, high-performance and high-efficiency Milling technologies Microlution Specialized in five-axis Milling, femtosecond Laser for hole-drilling and micro-cutting in a wide range of industries

Market Segmentation

Aerospace ICT Medical Electronics Energy Automotive

GFMS Korea for Swiss Business Hub Korea and Swissmem | Mai 2020

From agent to sales & service

• rganisation in Korea

1972 Sales agreement with agent for Mikron milling machines 2001 Foundation of AgieCharmilles Sales organisation 2016 Integration of Mikron milling machines into AgieCharmilles Sales

• rganisation and rename into GF Machining Solutions Korea

Termination of cooperation with agent for Korean market 2019 Reinforce sales, application and service team for milling machines

GFMS Korea for Swiss Business Hub Korea and Swissmem | Mai 2020

1 2 3 4 5 6 7 8 9 10 50 100 150 200 250 300 350 400 450 500 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Korea during past 20 years

Samsung Mobile LG Mobile Hyundai KIA

GFMS Korea for Swiss Business Hub Korea and Swissmem | Mai 2020 Million pcs.

GFMS Korea for Swiss Business Hub Korea and Swissmem | Mai 2020

The conflict between both countries is a good opportunity to enter or re-enter into this market! Historically both countries have similarities in culture and tradition, but also different memories about past. Comparable with Europe and Germany, however Europe and Germany strongly worked

• n common history and rehabilitation.

Important, big companies decided not to invest in Japanese technology and goods anymore, due to recent disagreements. Sub suppliers tend to follow big companies

Trade conflict Korea-Japan

GFMS Korea for Swiss Business Hub Korea and Swissmem | Mai 2020

• Constant market presence increase chances to sell
• Work with local employees together helps HQ and locals for a better common

understanding and communication

• Support on site strengthen knowledge of products for a higher professional approach

to customers

• Products with high quality and precision are demanded
• Special technology and niche products are always welcome

Why and how enter into Korean market

Q&A

Click + connect with us!

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Jacqueline Tschumi Consultant Japan + South Korea jtschumi@s-ge.com Switzerland Global Enterprise Roger Zbinden Head roger.zbinden@eda.admin.ch Swiss Business Hub Korea

Stay informed COVID-19 information and upcoming webinars

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Upcoming webinars We regularly offer webinars with COVID-19 insights but also besides the Corona topic. See if there is something that interests you! In case you are missing a topic, feel free to contact us and share your ideas and needs with us. READ MORE HERE COVID-19 information for SMEs The number of cases of coronavirus infection is increasing worldwide, and with it also uncertainty. What do exporters need to be aware of and where can they get financial assistance in the event of liquidity troubles? This continuously updated overview

• ffers orientation and assistance.

READ MORE HERE

THANK YOU VERY MUCH FOR YOUR PARTICIPATION