The Ministry of Knowledge Economy (MKE) and the Small and Medium Business Administration (SMBA) held a presentation about the diversification of smaller companies’ exports at the main conference room of the Korea Federation of Small and Medium Business (KBIZ), on Friday, January 30, in Yeouido.
Lee Youn-ho, Minister of Knowledge Economy, and Hong Suk-woo, Administrator of SMBA, together held a presentation which explained how to support small-sized companies to access the UN procurement market.
As the Korea-US FTA is almost finalized and the Korea-EU FTA has recently begun, companies are becoming more interested in the foreign procurement market, but their grades are insufficient. The presentation was given to acknowledge the need for furnishing procurement information, provide procedures of procurement in the UN market, jointly examine a successful example, and explain the support policies.
Korea’s share in the UN procurement market was just 50 million dollars out of a total of 10.1 billion dollars in 2007, which was just 0.51 percent.
The presentation received information about the strategy to access the UN procurement market from the Korea Trade-Investment Promotion Agency (KOTRA), information about the support policy for foreign procurement from the Small and Medium Business Corporation (SBC), and examples of existing cases of contact with the overseas market from Caravan ES.
The SMBA has created an institutional base called Finance for Foreign Procurement which can help some smaller companies to cover production costs when they receive an order from a foreign procurement market but suffer from a cash shortage. They will be prepared to aid the company with funds of up to 2 billion won.
Caravan ES had this problem. Even though they finished a UN procurement contract, the company had a difficult time completing the contract because of a shortage of funds. But with the help of the Finance for Foreign Procurement program they were able to achieve a stable production capacity. They passed on their vivid experience of receiving 100 million dollars more in orders from the UN procurement market.
The MKE and SMBA will develop a cooperation model for supporting successful access into not only the UN procurement market but also the foreign government procurement market involved in the US, and reinforce support to small and medium export enterprises.
