Korean firms brace to bounce back from pandemic

Yonhap via The Korea Herald/Asia News Network

SEOUL — Major South Korean companies have resumed operations at their overseas plants and are speeding up business normalization since suffering disruptions from the COVID-19 pandemic.

This month, the nation’s two tech giants, Samsung Electronics and LG Electronics, restarted their production plants in India, which had been shut down due to the host government’s strict containment measures. Now, they have restarted work at more than 90 percent of the global production bases they had shut down.

The nation’s largest automakers, Hyundai Motor and Kia Motors, also reopened most of their overseas plants, including those in the US, China, India, Russia, Turkey and Brazil. Only Kia’s Mexico plants remain closed.

Korean companies also began to dispatch workers overseas to monitor production and investment activities.

Samsung, LG and SK have sent workers to their factories in China, which approved a fast-track customs clearance process early this month for businesspeople from Korea.

On Friday, around 300 semiconductor engineers from Samsung Electronics were sent to the Xian plant to pick up the expansion of the new line set to start mass production in the first half of next year. The plant is Samsung’s only overseas memory chip production base.

The company’s affiliates Samsung Display, Samsung SDI and Samsung Electro-Mechanics sent 215 employees to Tianjin this month.

LG was the first group to send workers to China since the introduction of the fast-track system.

On May 3, 240 LG Display and LG Chem workers left for Nanjing, China, on a chartered plane. LG Chem is expanding its battery plant in Nanjing with an investment of around $1 billion.

SK Innovation dispatched 120 engineers last week to the site of a new battery plant in Yancheng, Jiangsu province. It is establishing a joint venture with China’s EVE Energy to build a battery plant with a capacity of 20-25 gigawatt-hours.

Additionally, major retail stores in Western countries are resuming business.

Best Buy in the US, one of the top five sales outlets for Samsung Electronics and LG Electronics, plans to reopen up to 600 stores within this month. Best Buy is North America’s largest consumer electronics distribution network with more than 1,000 stores across the region. It has been closed since late March.

Media Markt, Germany’s largest consumer electronics retailer, resumed operations at major stores early this month. Major European distribution channels, such as Dixon CarPhone, Media Expert and MediaMarktSaturn, have reopened some of their stores.

As businesses cautiously return to normal, heads of large corporations, including Samsung, Lotte and SK, are seen coming to the fore to encourage their workforce in the new normal.

“There is no future if you get caught up in the past or settle down in the present,” said Samsung Electronics Vice Chairman Lee Jae-yong, who visited the memory chip plant in Xian on May 17.

“In order to create a new growth engine, we must proactively prepare for the huge changes coming,” he said.

Lotte Group Chairman Shin Dong-bin returned to Seoul from Japan this month to strengthen on-site management.

“All of the group’s affiliates should continue to check domestic and foreign situations and review their business strategies,” Shin said. Lotte plans to announce its mid- to-long-term strategy at its value creation meeting in July.

SK Group Chairman Chey Tae-won has increased the number of videoconferences since the pandemic.

“It’s time to abandon the attitude of ‘Let’s hang in there’ and set up a completely new safety net,” he said, launching an emergency response system for affiliates.

The group is also speeding up its expansion into the pharmaceutical and bio sectors. SK Biopharm announced this month that it had released a new epilepsy drug in the US market.