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Kang Seung-woo

Korea Times Business Reporter

Kang Seung-woo is the Business Desk editor at The Korea Times. Prior to this position, he covered politics, national affairs, finance and sports.

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Companies

Korean wages 12th highest in OECD

By Kang Seung-woo Korean wages are higher than the average of advanced economies when adjusted for purchasing power, the Organization for Economic Cooperation and Development (OECD) said Sunday. The country’s tax and social security burden imposed on individuals was measured to be lower than most OECD member countries, which offers an explanation for widening inequality here. According to an OECD report titled ``Taxing Wages,’’ the annual salary of the average Korean was at $43,048 last year on a purchasing power parity (PPP) basis, which was the 12th highest among the 34 OECD member nations and well above their average of $35,576. Workers in Britain led the list with $53,622, followed by those of Luxembourg and the Netherlands, who made $53,561 and $52,581, respectively. Japan placed 11th with $43,625, while the United States was one notch behind Korea with $43,039. On a PPP basis, the OECD valued the local currency at 822 won to $1, or about 70 percent of its value based on the current exchange rate of 1,156 won. Mexico stayed at the bottom of the standings with $10

May 15, 2011By Kang Seung-woo
Companies

LPG suppliers biggest anti-trust violators

By Kang Seung-woo The liquefied petroleum gas (LPG) and aviation industries came top in terms of fines issued by the nation’s anti-trust watchdog last year. The Fair Trade Commission (FTC) announced in its report Wednesday that six LPG suppliers were ordered to pay a cumulative 409.4 billion won ($379.10 million) in fines in 2010 for fixing product prices, while 21 domestic and foreign air freight service providers were also fined 84.3 billion won on similar charges. The organization decided to punish the six LPG providers a combined 668.9 billion won for fixing prices in December 2009. The companies subject to the regulatory measures are E1, SK Gas, SK Energy, GS Caltex, Hyundai Oilbank and S-Oil. The penalty is the largest ever imposed on a single industry in Korea, indicating that the government is getting tough on activities that hamper fair market competition. SK Gas was fined the most at 198.7 billion won, followed by E1 with 189.4 billion won; SK Energy, 160.2 billion won; GS Caltex, 55.8 billion won, S-Oi,l 38.5 billion won and Oilbank, 26.3 billion won. T

May 13, 2011By Kang Seung-woo
Companies

Aging workforce feared to hurt growth potential

By Kang Seung-woo Korea’s workforce is getting older, as people aged 50 or more took up a larger portion of the job market last month, a government report showed Thursday. Observers worry that this trend could hurt the country’s growth potential. According to Statistics Korea, the number of employed people in the 50 to 59 age group surpassed the 5 million mark for the first time last month, amounting to 5.08 million, up 125,000 from March. In addition, the growing trend helped the number of employed people who are over 50 to top 8 million for the first time. The figure is a huge increase in comparison with the past. In April 1991, the number of working people over 50 stood at 4.03 million; and in April 2001, 5.1 million. The report showed that the employment growth in this age group is leading them to take center stage in the nation’s workforce, nudging aside those in their 30s and 40s. The number of those above the age of 50 in employment accounts for 33 percent of all employed people, which was tallied at 24.4 million last month, while those in their 30s a

May 12, 2011By Kang Seung-woo
Companies

Bad bank to buy up 1 trillion won of soured loans

By Kang Seung-woo A debt clearing house or a bad bank, backed by other banks and the government, is likely to acquire 1 trillion won worth of soured construction loans by June. Lenders are trying to salvage as much as they can from their non-performing assets, a financial watchdog and sources at the banking sector said Thursday. According to the Financial Supervisory Service (FSS) and banking industry officials, eight banks, along with the United Asset Management Corp. (UAMCO), a bad asset buyer created by these banks under government supervision, plan to contribute about 1.2 trillion won to establish a bad bank in a bid to bolster their balance sheets. The eight lenders are Kookmin, Woori, the National Agricultural Cooperative Federation (Nonghyup), Shinhan, the Korea Development Bank (KDB), Hana, Korea Exchange Bank (KEB) and the Industrial Bank of Korea (IBK). A bad bank is a financial vehicle that takes over non-performing loans from other banks, enabling them to make a fresh start. The move came as the nation’s financial authorities are pushing local banks and no

May 12, 2011By Kang Seung-woo
Companies

Producer prices up 6.8% in April

By Kang Seung-woo Producer prices went up in April for the 10th straight month due to high energy prices, the central bank said Wednesday. According to the Bank of Korea (BOK), the nation’s producer price index (PPI) increased 6.8 percent last month from a year earlier. The PPI is a barometer of future consumer-price inflation. In March, the PPI registered a 28-month high of 7.3 percent on the back of a hike in oil and commodity prices. The previous high was a 7.8-percent rise in November 2008. Compared to the previous month, April’s PPI rose 0.3 percent, slowing from a 1.2 percent gain in March. The BOK attributed the slowdown to a decline in prices of agricultural and fisheries goods. Producer prices for those goods dropped 6.6 percent from a month earlier thanks to good crop conditions. Prices of industrial goods, however, rose 0.8 percent from the previous month as a rise in global oil costs drove up the prices of oil and chemical products, it added. “Good weather conditions and recovery from the nationwide foot-and-mouth fiasco prompted producer prices of ag

May 11, 2011By Kang Seung-woo
Companies

Decision on Hana-Lone Star deal due this month

By Kang Seung-woo The nation’s top financial regulator said Monday that a decision will be made on Hana Financial Group’s purchase of the Korea Exchange Bank (KEB) from the Dallas-based buyout fund, Lone Star, this month. “I will make it faster,” Financial Services Commission (FSC) Chairman Kim Seok-dong said, when asked whether a decision will be made before June. “I want to eliminate uncertainty in the financial market.” “I will follow the law and regulations,” he added, without specifying whether his decision will mean approval or rejection of the deal. The FSC has scheduled a meeting for May 18 to discuss the issue, the date after which Hana and Lone Star can call off their deal. Hana, the nation’s fourth-largest financial services company, agreed to a deal on Nov. 24 last year to purchase the Texas-based buyout fund’s 51.02 percent stake in KEB that it acquired in 2003. Kim’s remarks came after the FSC repeatedly put off its decision on Lone Star’s eligibility to be the biggest shareholder of KEB from March. The decision is a critical prerequisite for Lone

May 9, 2011By Kang Seung-woo
Companies

SK Chemicals eyes 3 trillion won in sales

By Kang Seung-woo SK Chemicals, Korea’s leading pharmaceutical and chemical products manufacturer, has set its sights on 3 trillion won ($2.76 billion) in sales by 2015, its chief executive said Monday. Chief executive officer (CEO) Kim Chang-geun said through its internal broadcasting network that SK Chemicals will seek to reach a record 2 trillion won in sales in the eco-friendly chemical sector and 1 trillion won in sales in the life-science sector in 2015. Kim, who serves as vice chairman of the board, also said that the company is targeting 300 billion won in operating profit by that time. Last year, the company, established in 1966 as Sunkyong Chemical Fibers, raked in 1.3 trillion won in sales and 68.3 billion won in operating profit. In line with group chairman Chey Tae-won’s pledge to increase investment into life science and pharmaceuticals, SK Chemicals has shifted its business portfolio from textiles to environmental chemicals and life sciences over the past decade. As part of its efforts to reshuffle its business portfolio focusing on its bio and medici

May 9, 2011By Kang Seung-woo
Companies

Finance ministry asserts exchange reserve stays within proper levels

By Kang Seung-woo Korea’s foreign exchange reserves remain at reasonable levels based on the revised metrics to assess the adequacy of foreign reserves by the International Monetary Fund (IMF), the finance ministry and the central bank said Friday. According to the Ministry of Strategy and Finance and the Bank of Korea (BOK), the executive board of the intergovernmental organization remodeled its standard to estimate each country’s reserve adequacy in March, divided into three categories ― advanced-market countries, emerging market economies and low-income countries ― based on the broad characteristics of each nation. The new metrics take into account four risk factors such as exports and short-term foreign debts. “The IMF did not calculate Korea’s foreign reserves with its yardstick. But we applied the same calculation method and found that the country's reserves are within the appropriate level,” said an official at the finance ministry. This announcement came after Korea’s foreign reserves reached a record $307.2 billion as of the end of April, up $8.58 billion from

May 8, 2011By Kang Seung-woo
Companies

KB Financial eyes Vietnam expansion

By Kim Tong-hyung HANOI ― Vietnam is helping inspire a lucrative outlook for KB Financial Group’s attempts to go global, according to a senior executive of the Korean banking giant. But the firm’s business strategies for the country appear to be more about picking its spots than charging head-on. Korean financial companies have been collectively drooling over Vietnam’s underdeveloped but potentially immense financial market. Shinhan Financial, Korea’s third-largest banking group by asset, has been particularly aggressive as it expects to have nine branches by the end of the year operated by its two local business units ― Shinhan Vietnam Bank and Shinhan Vina Bank. Shinhan’s business in Vietnam has relied heavily on corporate financing, but the company is now trying harder to strengthen its position in retail banking. The company is also preparing a credit card service, which could be launched as earlier as this month. Compared to its up-and-running domestic rival, KB is a latecomer, having just opened its first branch in Ho Chi Minh City. However, KB Financial President

May 6, 2011By Kang Seung-woo
Companies

Mom-and-pop stores to face new pressures

By Kang Seung-woo Mom-and-pop stores are expected to face renewed pressures when the free trade agreement (FTA) goes into effect this July following parliamentary approval this week. The Korean government has come up with several measures geared toward protecting small-sized stores from super supermarkets (SSMs), which has been a hot topic here. The Ministry of Foreign Affairs and Trade (MOFAT) has claimed that small stores are part of Korea’s unique culture and that they needed to be safeguarded during the FTA talks with the EU. Yet, the ministry is concerned that Korea might get in trouble in case the EU takes issues with the measures. ``The EU by and large understood our explanations with regard to helping small shops during the FTA negotiations and it did not bring fresh opposition after the agreement received the green light from the Assembly this week. We will wait and see,’’ a MOFAT official said. Korea has introduced a regulation that bans the establishment of a new SSM within a 500-meter radius of an existing mom-and-pop store. Parties recently agreed to

May 6, 2011By Kang Seung-woo
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