South Korea: Top chaebols see affiliates mushroom
Published on Fri, 2011-07-08 09:13
Source: Yonhap News report cited by The Korea Herald.
The number of affiliates of South Korea’s 15 largest chaebols has increased about 65 percent over the past four years, as those huge family-run business conglomerates have aggressively expanded their territory in the construction and real estate industries, reported this week the civic group Citizens' Coalition for Economic Justice (CCEJ, focal point of Social Watch).
According to the report, companies affiliated with the top 15 conglomerates numbered 778 as of April, jumping from 306 four years ago, said South Korean news agency Yonhap.
Hyundai Heavy Industries, the nation’s leading shipbuilder, showed the highest growth rate in the cited period, tripling its subsidiaries to 21, while steelmaker POSCO gained 38 more firms to have 61, the CCEJ study said.
Non-manufacturing and service industries accounted for the largest number of affiliates at 362, or 74.2 percent of the total number of firms that emerged in the last four years, it noted.
Among them were 86 construction, real estate and rental companies, 58 technology, education and professional support services, and 57 publishing, communications and IT service firms, the report added, according to the Yonhap article.
“As construction, real estate and rental businesses do not require specific technology or resources under South Korea’s market environment and produce vast interests, conglomerates with a competitive edge in capital strength have considered them as industries that are easy to enter,” the civic group said in a statement.
The administration of Lee Myung-bak, a construction CEO-turned-president, won office in early 2008 on pledges of deregulation and business-friendly policies, and since has scrapped anti-trust rules on family-run business conglomerates and cut corporate taxes through a package of economic reforms.