Chinese capitals are swarming around South Korea‘s robotic industries. Incidences where millions of dollars of investments are suggested are occurring in succession. Although it is a positive thing that South Korea’s robotic industries can easily enter huge Chinese markets by attracting Chinese capital, some are worried about technologies being leaked as Chinese businesses are asking South Korean robotic manufacturers to build their production facilities in China as a condition for investments.
According to industries, South Korea’s robotic industries are receiving love calls from Chinese businesses about possibilities of investments.
One of South Korea’s robotic company is currently discussing with a Chinese company regarding an investment worth millions of dollars. As a condition of an investment, this Chinese company requested this South Korean company to build its plants in China. However South Korean company’s stance is that it wants to maintain its production lines in South Korea.
Another South Korean company, which is listed on KOSDAQ, has been receiving inquiries about investments from Chinese capital through investment companies. This company however refused these offers as its business is not in a situation where it urgently needs to seek outside investments.
Industries are agreeing that investments from Chinese businesses are still in progress.
In this past August, ‘South Korea-China Robotic Industry Strategic Investment Attraction Roadshow’, which was ran by KOTRA (Korea Trade-Investment Promotion Agency) and Korea Institute for Robot Industry Advancement (KIRIA), was held for the first time and it had 38 Chinese companies and 11 South Korean companies participating. One of the reason why this event was held is because there has been consistent investments by Chinese businesses into South Korea‘s robotic industries.
“We understand that there are continuous investments made by Chinese businesses into South Korean robotic manufacturers and this is the first time Chinese companies have established trade delegations just for robotic industries.” said Team Leader Jung Eun-joo of KOTRA’s Intelligent Information Industry Attraction Team. “Although we were worried about apathetic reactions towards this briefing session due to aftereffects of THAAD (Terminal High Altitude Area Defense), interests from Chinese investors were actually more positive than our expectations.”
According to The Bank of Korea, Chinese businesses invested $8.9 billion into robotic manufacturers in 2016. South Korea’s robotic manufacturers are also drawing attention from Chinese capital. Best example in South Korea is DST Robot that was acquired by a Chinese business in 2015.
After declaring ‘rising of robots’ in 2014, Chinese Government has been fully supporting its robotic industries to grow. As part of strengthening competitive edge of its robotic industries, Chinese businesses have ben acquiring foreign robotic manufacturers.
Reason why South Korea’s robotic manufacturers are drawing attention from Chinese capital is their technical skills. Although size of South Korea’s robotic markets is smaller than China’s robotic markets, South Korean businesses’ knowhow in robotic technologies is seen as more advanced than that of Chinese businesses. Ministry of Science and ICT analyzed that South Korean businesses’ technologies and Chinese businesses’ technologies are 4.2 years and 7.1 years behind that of American businesses respectively.
From South Korean businesses’ standpoint, investment offers from Chinese capital are very tempting as they can secure investments and stable markets in China at the same time. Since South Korea’s robotic industries are formed with small and medium companies at the center, investment offers are very welcoming for robotic manufacturers that have had difficulties in securing funds.
“It is true that Chinese businesses are continuously attempting to invest into South Korea’s robotic manufacturers.” said Ryu Ji-ho who is the head of KIRIA’s Robot Growth Business Group. “Because Chinese businesses are distressing about technical skills in major robotic parts such as sub-motor, controller, and reducer, they are looking to invest into robotic manufacturers as well as companies that manufacturer parts for robots.”
However some are still worried about South Korean technologies being leaked when South Korean businesses welcome foreign capitals. Some are pointing out that South Korea’s robotic industries need excellent ideas that can maintain fundamental technologies while securing driving forces through investments.
“Possibility of companies’ accumulated knowhow in technologies and skilled personnel being leaked to foreign countries cannot be ignored when control of a company is handed over to a foreign business due to foreign capitals.” said Director Cho Young-hoon of Korea Association of Robot Industry. “We need to consider side effects that may cause on competitive edge of South Korea’s robotic industries that are major industries for South Korea in the future.”
Staff Reporter Lee, Youngho | youngtiger@etnews.com