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Subject Press Release : Taking advantage of the opportunity to start over
Posted By YIHO (ip:)
  • Date 2015-10-26 19:04:11
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Taking advantage of the opportunity to start over

from BusinessMirror



SCOTTISH-BORN scientist, inventor, engineer and innovator Alexander Graham Bell once said that when one door closes, another opens, but we often look so long and so regretfully upon the closed door that we do not see the one which has opened for us.

Korean Chamber of Commerce Philippines (KCCP) President Ho-ik Lee saw the opened door and the opportunities presented to him when his former company Samsung Corp. plunged into difficult times because of the 1997 Asian financial crisis.

Lee said he used to work in the iron and steel department of the company, which he described as a triangle business that involved South Korea, Indonesia and China.

He said they used to earn $50 million annually from two corporate buyers in Indonesia, where they extend a credit line of 180 days.

But in 1998, because of the financial crisis, the Indonesian rupiah fell from 2,400 to 18,000 against the dollar.

“It became impossible for them to pay.  The Indonesian company eventually closed. We collected the collateral but our team was broken up,” Lee said.

The South Korean economy was also fairing badly at that time with foreign debt-to-GDP ratio reaching 40 percent, its currency fell from 800 to 1,700 to the dollar, and it suffered from corporate bankruptcies.

The financial crisis, which started in Thailand, heavily affected the Indonesian and South Korean economies.  It also impacted the economies of the Lao People’s Domocratic Republic, Malaysia, the Philippines and Hong Kong.

The choice

After their team was broken up, the two managers in their department chose to relocate themselves in Indonesia to set up their own businesses.

Lee said it was illogical for him to also go to Indonesia as there would be three of them that would be competing there.

He said the choice for him was either to move to Vietnam, Myanmar or the Philippines.  Eventually, by year 2000, Lee started establishing his footing here in the country.

“I came to the Philippines in the past for business trips.  It was similar to other Asean countries.  It was more developed because of the shopping malls and it was loyal to Samsung before,” Lee said.

By that time, he started Yiho Corp., his own trading company, which, like his previous employment, is also involved in iron, steel and chemicals.

“We buy from China and Korea, and resell to the Philippines, Indonesia, Thailand and Vietnam,” Lee said.

By 2003 Lee has also opened another office in Hong Kong.  Two years later an office was also established in Korea.  And by 2009, he also opened an office in China.

Lee said that it was easy enough establishing a company in the Philippines, but it was difficult getting a loan facility.  He also said it was expensive for them to maintain a warehouse in the country.

The Philippine market

Lee, who is on his first year as KCCP president, said the Philippines is a very enticing market because of its huge population, which he coupled with the fact that Korea is now a mature market.

“When I first came to the Philippines, the population was at 74 million, and now it is at 110 million.  It is a big market whose population doubles every 30 years.  It is a bright and emerging market,” Lee said.

He added: “The Korean market is mature now and it is difficult to jump to another level.  We have reached a tech peak level.”

From his own experience in the Philippines, Lee said he has seen the economic turnaround that happened over the last five years.

“The first 10 years here was terrible.  President Aquino moved the country to become an emerging economy.  I have seen the many constructions that are happening,” Lee said.

However, for the all the strong interest Korean companies have in the Philippines, Lee said there are issues that the Philippine government needs to address, including the 60-40 ownership restriction in the Philippine Constitution.

Lee added that it is not profitable for Korean businesses here because of the restriction.  He said companies could use dummies, but it is illegal.

“There are unreasonable regulations.  If all other countries are doing it, then it is understandable.  We want to do business in a legal way,” Lee said.

Lee predicted that if and when an economic Charter change happens, tons of Korean investment will start flowing into the country across all industries.

Lee said Korean companies will not only be setting up businesses in Metro Manila but in all provinces.  He then specifically cited Cebu, Baguio and Davao as ideal business destinations.

Outside of the Charter change, Lee added that they are also concerned on status of the public-private partnership projects after a new administration is installed next year.

“Continuity is important to us.  Big construction companies are hesitant to enter new projects,” Lee said.

KCCP currently has 350 corporate and association members, with 106 of them located inside the Philippine Economic Zone Authority areas.

Tourism and crime

Lee said security issues among Korean tourists and those living here in the country are now a concern.

“There are 10 Koreans who were murdered in the country this year.  There are a lot of illegal guns.  Security is not tight.  There are not enough CCTV [closed-circuit television camera] around,” Lee said, while adding that there are a lot more petty crimes that are not being reported to the police.

Lee added that in 2014, 10 Koreans were also killed in the country.  He said that last year the number of Koreans killed ranked third, after Chinese and Indian nationals.

Lee estimated that there are probably 100,000 Koreans living in the country and another 88,000 who are undocumented.  Among the areas with large Korean population are Metro Manila, Cebu, Baguio and Angeles City.

As for tourism, Lee said the Philippines will continue to be the logical choice as a destination among Koreans because of its proximity and its people.

“Flight from Korea to the Philippines is only three-and-a-half hours. There are other options in Thailand, Indonesia and Malaysia, but the flight is six hours.  The Philippines geographically is a good place and the people are very kind,” Lee said.

Lee added that during winter time in their country, Koreans want to travel in places where there are white beaches and in locations where they can play golf.

For the first eight months of the year, Korea ranked first with 901,749 arrivals in the country, representing 25.12 percent of the total market.  In August alone, Korean tourists spent P8.85 billion during their stay in the country.

Lee said that, because of cultural differences, they have been advising Korean on what Filipinos are like.

“If they do what they do in Korea, where they shout when talking, here in the Philippines they will think they are angry,” Lee cited as an example.

Lee also added that the Philippines is not yet an expensive country to visit for Korean tourists.

Image Credits: Jimbo Albano

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