Korean firms eye Phl as source of raw materials

MANILA, Philippines - Korea’s largest association of importers is interested in sourcing from the Philippines the raw materials for its top manufactures.

Commodities Korean manufacturers are scouting for are coal, precious minerals, rare earth metals, coal and raw sugar.

A 120-man delegation from the Korea Importers’ Association (Koima), composed of senior officers of its member companies, will be in the country until July 20 to meet with Philippine exporters to find trade partners.

Koima handles 70 percent of Korea’s total imports which reached $519 billion in 2012. The association of importers serves the needs of Korean manufacturers, processors, distributors and retailers.

KOIMA dispatches purchasing missions to countries in which Korea has a large trade surplus about four to five times a year.

Throughout a trade mission, KOIMA matches foreign suppliers to Korean importers.

Koima chairman and CEO Thomas T.Y Shinn said the Philippines was chosen as the next stop for its buying mission because of strong history, economic and cultural ties between the two countries.

Also taken into consideration were the ease of communication between Philippine and Korean businesses, the Philippines being an English-speaking nation.

“Some members of our delegation know the Philippines very well, but some of them do not know Philippine products very well,” he said in an interview during the ongoing business seminar in Sofitel Hotel in Pasay.

“They think the Philippines is all about agricultural products, but this time our members will look for what kind of other products are available in the Philippines for Korea.”

Shinn said Koima is meeting with several Philippine exporters engaged in food manufacturing, agricultural products, electronics, and mining during their visit.

Shinn said Korean companies are also looking at investment opportunities in the Philippines for food processing, fisheries products, garments and electronics.

“This is a good opportunity for our importers because they are also thinking about investment. If we find something, why not invest here. We can produce here and export to Korea or produce here and export to other Asian countries,” he said.

Korean manufacturers are particularly interested in securing supply of precious metals, rare earth metals, coal, raw sugar.

Shinn said Korea imports most of its raw sugar requirement from Australia and Brazil.

He said Koima is looking for long-term contracts with Philippine exporters.

The Korean manufacturing industry relies heavily on imported raw materials but compensates for value-adding.

South Korea is particularly strong in the manufacture of high technology electronic products such as mobile phones, televisions, and appliances.

It’s other strong manufacturing subsectors are automotives, shipbuilding, petrochemicals and steel-making.

Nic Bautista, commercial counselor in the Philippine Trade and Investment Center (PTIC) based in Seoul, said Korea’s position as a strong technology provider in Asia would benefit the Philippines as a supplier of raw materials and as a possible production hub in Southeast Asia for some companies.

He said the buying mission is an indication of increased awareness that the Philippines is now an investment destination.