By Lee Hyo-sik
Korean ceramic makers are being squeezed due to cheap Chinese products and high-end expensive imports from Britain, Italy and other European nations.
Hankook Chinaware, the industry’s leader, earned a mere 39 million won ($36,000) in operating profits last year. In 2010, it incurred an operating loss of 4.3 billion won.
Hankook PR officers say that there will not be any marked improvement in its bottom line.
Revenue has hovered at around 50 billion won for the past four years.
Haengnam Chinaware, another major player, saw its operating earnings halved to 3.6 billion won in 2011 from 6.2 billion the previous year. Its sales fell to 4.8 billion won from 5.1 billion won over the one-year period.
Their sluggish performance is largely attributed to the overall business downturn and a massive influx of foreign-made chinaware into the country.
According to the Korea International Trade association, Korea’s chinaware imports stood at $120 million in 2011, up four-fold from $31.5 million in 2000. Low-priced made-in China products were estimated to account for more than half of inbound shipments.
A Hankook spokeswoman said. ``It is true that Korea imports a huge volume of made-in China chinaware, which has been popular with budget-conscious shoppers these days. But their quality is substandard. As far as we know, many consumers who once bought Chinese goods returned to our stores.’’
The company operates a manufacturing plant in Cheongju, North Chungcheong Province. But it exports a large portion of its output to many countries.
``We have been shipping more products overseas. Our goods are really popular in the Middle East because consumers there are attracted to our designs,’’ she said.
A Haengnam Chinaware spokesman said the domestic ceramic market has remained stagnant. ``But we are doing everything we can to ride out the current difficulty. We have expanded our outbound shipments to Europe and North America. Foreign markets now account for over 30 percent of our entire sales,’’ he said.
The company has a plant in Yeoju, Gyeonggi Province, and Mokpo, South Jeolla Province. It also operates a joint venture in Indonesia.
``Chinese chinaware is really cheap and mostly sold at large discount stores. We just cannot compete with them price-wise. So, we have boosted the production of high value-added bone china targeting newly-wed couples and other value customers,’’ the spokesman said.