Top 4’s Sales Contract by 12 Percent


By Seo Jee-yeon
Staff Reporter


For the first time in six years, sales of the nation’s top four chaebol contracted by 12 percent over the past one year to April this year.

This means chaebol have been growing slower than the economy in a reversal of the past trend when conglomerates had been growing 3-5 times faster than the economy.

According to the Fair Trade Commission (FTC), manufacturing sales by the top four chaebol_ Samsung, LG, Hyundai Motor Company and SK _ amounted to 257 trillion won for the past one year up until last April, down 12 percent from the same period in 2003.

Including sales of financial arms, their combined sales dipped by 11.8 percent to 298 trillion won.

``It is rare to see sales of the nation’s four biggest business groups grow slower than the economic growth rate,’’ said Yoo Hwan-ik, an official from the Federation of Korean Industries (FKI).

What is worrisome is that their sales posted a minus growth, he added. Sales of the nation’s top four chaebol have continuously grown for the past six years since 1999, motoring the economic growth.

For instance, the combined sales of the top four chaebol grew by 11 percent for the past year up until April of 2003.

It means chaebol grew about four times faster than 2.8 percent growth of the gross domestic product, which is the total output of goods and services produced in a country.

``A double-digit contraction in chaebol sales growth rate is partly attributed to the protracted economic slowdown. However, it seems to signal a warning for the nation’s future economic growth in view of the fact that those chaebol have made a significant contribution to the GDP growth,’’ Yoo said.

According to Rep. Chun Byong-hyun of the governing Uri Party, the ratio of total assets of the nation’s major 18 business groups with assets of more than five trillion won to the GDP reached 64 percent last year.

jyseo@koreatimes.co.kr