Friday 29 Mar 2024
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KUALA LUMPUR: It no longer takes a flight across the South China Sea to South Korea or an understanding of the Korean language for our small- and medium-sized enterprises (SMEs) to do business with the country now that the Gyeonggi Business Center (GBC) has set up its regional base in Kuala Lumpur.

GBC director for Asia Patrick On said the influence of Korean popular culture, known as the Hallyu, in Southeast Asia has created an increasing appetite for Korean products and technology in the region.

To satisfy this growing demand, the South Korean-endorsed GBC Kuala Lumpur (GBCKL) has been established to assist Korean SMEs penetrate Southeast Asian markets by forming working trade relationships with its local counterparts here.

On said GBC works like a “trade matchmaker” between South Korean and Southeast Asian SMEs through trade missions and fairs, which GBC organises with its sizable budget of US$5 million (RM16.7 million)  per year.

“Our role is to promote trade between South Korea and Southeast Asia. We introduce South Korean SMEs to Malaysian or Southeast Asian counterparts within the industry and we bring Southeast Asian SMEs to Gyeonggi to meet with potential South Korean business partners in pre-matched meetings,” he told The Edge Financial Daily in an interview.

“Our objective is always to look for a right local partner for the South Korean company so that they can build a business relationship and eventually sign partnership agreements or establish some kind of collaboration,” he said.

GBC does not meddle in the trade itself and only monitors the progress of South Korean SMEs which have registered with GBC in their home country.

The highlight of GBC’s matchmaking calendar is the widely anticipated G-Fair, which is held annually either in South Korea or the various countries in which GBC operates.

“GBC is trying to establish the G-Fair as the largest and most popular South Korean trade fair. We want to capitalise on the global phenomenon of Korean pop culture and use it to highlight very good Korean products,” said On.

Malaysia is the host for this year’s G-Fair, which will be held on Dec 2 and 3 at Shangri-La Hotel, Kuala Lumpur. The event will showcase 64 carefully selected South Korean SMEs from different sectors such as information technology, and industrial and water treatment products.

G-Fair in Malaysia is also timely because the country will take over as chair of the Association of Southeast Asian Nations (Asean), and the formation of the Asean Economic Community (AEC) in 2015.

On said the implementation of AEC will offer South Korean SMEs and their products the necessary “springboard to the rest of the world”, especially since South Korea has signed a free trade agreement (FTA) with Asean.

Under the Asean-South Korea FTA, 90% of the products traded between the two countries enjoy duty-free status, a factor which would benefit South Korean and local SMEs.  

“Malaysian SMEs are always seeking new ideas and innovations and South Korean products offer them something which can be cost-competitive and technologically advanced.

“On the other hand, South Korean SMEs can gain from Malaysia’s large and inexpensive workforce, and thereby significantly lower cost of production by establishing their businesses here,” said On.

“Both sides can enjoy the benefits of the Asean-South Korea FTA by producing tariff- and tax-free South Korean products in Malaysia and exporting them to the rest of Asean, or even back to South Korea,” he said.

On expects South Korean SMEs to take advantage of Malaysia’s reputation and expertise in businesses which require halal certification to tap into new markets outside Asean.

“We know that the halal business is a global, billion-dollar industry. [South] Korean companies are only starting to learn more about the advantages of having halal-certified products to penetrate markets like the Middle East,” he said.

On said Korean SMEs and their Malaysian counterparts have the advantage of conducting cross-border trade with ease after the two states signed the Malaysia-South Korea Currency Swap-Finance Trade Settlement Facility.

Under the agreement, up to RM15 million will be made available in the South Korean and Malaysian central banks to facilitate trade settlements between firms of the two countries using their respective currencies.

GBC also seeks to establish a network of South Korean and Malaysian SMEs through a club known as KBiz to promote learning, networking and recognition opportunities.

“We want to act as a hub for business development in this part of the world,” said On.

 

This article first appeared in The Edge Financial Daily, on November 27, 2014.

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