By Jane Han
Staff Reporter
Concerns are growing that the rapidly souring conflict between builders and suppliers will hamper production across industries, as a group of local foundries on Monday stopped manufacturing cast-iron products for the second time over price disparities.
The latest move by the Korea Foundry Cooperative Association (KFCA) to stop manufacturing cast-iron goods fuels tension that's been escalating since early this year. Suppliers have demanded more money from their large corporate buyers so they can cover the rising costs of raw materials, but builders, also facing economic difficulties, haven't been able to match the price.
Cast-iron is essential for making cars, ships and machinery, but the rise of global scrap and pig iron prices has pushed foundries to the edge.
The KFCA, which has some 500 member firms, went into its first three-day work stoppage on March 7. But it extended this for another three days, claiming that the proposed 20 percent price hike by one of the biggest buyers of cast-iron goods, Hyundai-Kia Automotive Group, wasn't nearly enough.
The carmaker said last week it would pay 75 won more per kilogram of products, which is only half of what suppliers have demanded.
``These big corporations need to put a more realistic figure on the table, or else we have no other choice,'' said Suh Byung-moon, the chief director of KFCA, adding that other big builders like Doosan Infracore should state its price adjustments as well.
Also threatening a strike is the group of ready-mix concrete makers, as they claimed last week that they will discontinue production starting March 19 if builders don't pay at least 12 percent more for their products.
The Korea Federation of Ready-Mix Concrete Industry Cooperatives said in a joint statement that cement and gravel prices have gone up 30 percent, but ready-mix concrete prices have stayed fixed since 2004.
To these demands, however, builders defend themselves that the worsening economic conditions are squeezing everyone.
``We're going to continue the negotiation process, but doubt that we can satisfy the current demands,'' said an official of Doosan Infracore, the country's largest maker of construction machinery.