Exports of Listed Companies Outpace Domestic Demand

As the increasing trend of exports continues, the importance of exports on the sales of listed companies is outweighing the importance of domestic demand.

However, due to the aftermath of the rise of the exchange rate, it appears that gains of export companies lagged behind those of domestic goods companies.

According to the Korea Listed Companies Association on April 23, sales last year totaled 247.37 trillion won, which includes totals from 326 manufacturing businesses (except for changed businesses at the time of liquidation) liquidated in December. Exports accounted for 51.9 percent (128.30 trillion won) this year, higher than domestic demand, which was 48.1 percent (247.37 trillion won).

Such a comparison between exports versus domestic demand had shown the latter’s superiority for two years in a row from 2001, but the figures reversed as exports increased by 12.5 percent while home consumption decreased by 4.8 percent.

Exports in areas such as cars, electronic communications equipment, and transportation equipment were greatly increased, owing to the U.S.’s economic recovery and China’s economic growth.

As for the amount of exports classified by businesses, Samsung was on top, recording 34.23 trillion won, followed by Hyundai Motors (14.32 trillion won), Kia Motors (7.71 trillion won) and Hyundai Heavy Industries (6.61 trillion won).

On the other hand, companies whose domestic demand gravity was more than 50 percent were better off than export companies. Net gains of export companies in 2003 decreased by 34.1 percent compared to last year as losses from foreign currency exchange increased, but those of companies relying on domestic demand showed an increase of 20.9 percent.

The latter figure, 9.5 percent, was higher than the former 8.8 percent figure. As for the business profit rate of export amounts and the net gains rate of export amounts, the gap was even more broad, recording 11.3 percent and 0.5 percent, respectively. To illustrate, companies for home consumption earned 113 won by selling goods of 1,000 won, while export companies earned just five won.

Among 2,223 companies reliant on domestic demand, companies who accomplished the highest business profit rate compared to exports were cement companies such as Asia Cement (28.7 percent), Hyundai Cement (27.2 percent) and Sung Shin Cement (24.1 percent).

Jung-Eun Lee lightee@donga.com