Interview with Chairman of KFFIC (Korean Federation of Fasteners Industry Cooperatives) Mr. Hansung Jung

1. What important events have your esteemed association held, and what have been the accomplishments of the Association in the interests of your members in 2018?

Our association has been engaged in various projects in 2018.

In particular, we have proceeded with projects to enter the overseas market. In April, we formed a Korean delegation to the Taiwan International Fastener Show and witnessed the developing fastener industry in Taiwan through networking with the buyers and related organizations who have visited the fastener industry in the exhibition of various fastener companies of Taiwan. In addition, we dispatched a Korean delegation to the EFDA (European Fastener Distributor Association) conference in Rotterdam, Netherlands, and had an opportunity to discuss ways to cooperate with fastener distributors all over Europe, and visit the site of a leading fastener business in Germany and learned about the process of the advanced fastener industry, from production to supply. Besides these efforts, we are also knocking on the doors of markets in Japan, China, the USA, Vietnam, etc. for the overseas exhibition business as a part of the support for overseas advancement of our small-to-medium companies in the fastener industry.

Through these activities, we are receiving positive evaluations for supporting many fastener businesses in Korea to advance into the overseas markets and build good partnerships. We expect to continue our support through various projects.

2. Could you please tell us more about the production and trade statistics of the fastener industry in your region in the past few months? What do you think is the reason for such positive developments?

The fastener production by industry demand in Korea showed an increases of 74.6% in the automobile field, 5.6% in the construction field, 5.6% in electronics, and 14.2% in others (including market distribution). This shows that Korea has a higher level of dependence on the automobile industry compared to the USA or Europe and receives negative views in the aspect of balanced industry development. Nevertheless, it proves that the fastener industry of Korea has advanced in quality, developing along with the automobile industry.

Korea’s fastener industry, based on businesses with 10 or more employees, had 463 companies in 2016, earning US$8,085,000 in shipments per company and US$247,000 per person, in the whole population in the industry of 15,190, and showing recovery from the depression of shipments per company and per person in 2015.

The import amount in the fastener industry of Korea in 2017 recorded US$ 512.96 million dollars, a 4.1% increase from the previous year. The percentage by countries were China, the USA, Germany, Japan, and Taiwan, in order. Combining 37% by China and 25% by the USA, the percentage was 62% in the whole import amount, showing extreme concentration. By contrast, regarding exports, China showed a 9% increase and the USA showed a 16% increase.

The export amount in the fastener industry in 2017 recorded US$858.21 million, a 4.8% decrease from the previous year. The highest percentages by countries were China, the USA, India, Mexico, and Japan, respectively. Combining 22% by China and 20% by the USA, the percentage was 43% in the whole export amount, showing extreme concentration in exports. However, China showed a 19% decrease and the USA showed a 11% decrease compared to the previous year.

3. The ongoing trade war between the USA and China has significantly influenced global industries for a few months. Do you think that the trade war will have any significant impact on the market and the region your Association represents (please specify)?

It is difficult to answer, as it is still an ongoing issue. However, under the assumption that the trade war will continue, it is one of the biggest concerns that will immensely affect the trade environment.

As mentioned above, the fastener industry of Korea is closely linked to the automobile industry. The export to China showed a 19% decrease in 2017 compared to the previous year and a 0.5% accumulated increase as of August 2018. The dramatic decrease of 2017 can hardly be expected to reverse.

Exports to the USA also showed an 11% decrease in 2017 compared to the previous year and a 0.5% accumulated increase as of August 2018, showing no immediate prospect of reverse. If the retaliatory tariffs in the automobile industry are decided, we gravely fear that the exports to the USA by the fastener industry will be affected, influenced by the damage in direct car exports to the USA, as well as exports via China.

4. As there is still no sign that the trade war will end soon, what do you think your Association can do to help members face the challenges?

The level of dependence in Korea is extremely high on exports to the two countries, which causes grave concern. However, there are two ways to resolve this crisis. First, it is to relieve the current state that is given too much importance on the USA and China. We can cultivate various markets in other parts such as Europe, Southeast Asia, etc. for diversification of export markets. In order to do this, we will actively find new target regions, conduct conferences for export to target regions, strengthen ties with the cooperating organizations and potential partners, etc. We believe that this will open new markets for us.

The other solution requires time and effort. It is expanding the market, which is currently concentrated on the automobile industry, into various other fields such as aviation, space, electronics, architecture, machinery, and energy generation industries. This is also an issue that we need to continuously develop in the future, as it is insufficient for the industry alone to work on. It is a difficult project for the advancement of the structure of the fastener industry that the industry needs to cooperate with the government and related organizations.

5. In 2019, does the Association have any plans to give or participate in any regional or internationals events?

As mentioned above, we plan to actively participate in various activities for the market cultivation of Korea fastener industry in 2019, including support projects for Korea Pavilion in well-known overseas exhibitions, export conferences to meet with the buyers advancing into the target regions, strengthening ties with related cooperating organizations from the USA and Europe as well as the existing Asian organizations.

We hope that the Five Region Fastener Association Conference especially, although we have participated as rather formally and ceremonially, will show some effective results from this year, and make some changes if necessary. We still have a long and rough way to go among the leading players in the world market. Therefore, we hope that the related businesses and associations in the  five regions will participate with reformative minds and make the event helpful.

6. What are your expectations and prospects for the fastener industry in 2019?

The prospects for the global economy in 2019 doesn’t look very optimistic and the fastener industry also has a long and tough way to go. If the trade war between the USA and China does not end shortly, the influences in each industry will be immense and we expect that the extent of it in the fastener industry will also be beyond imagination. The related industries need to cooperate to wisely overcome the situation by finding a way out.

We expect substantive cooperation from the Five Region Associations in these times of crisis.

7. Is there anything else you’d also like to share with our readers?

We hope that this interview will be an opportunity to introduce the fastener businesses and products of Korea, and to revitalize the industry. We wish that the readers of this magazine would thrive in their businesses. Thank you!