South Korean conglomerates saw operation rate fall below 80% in Q3

[Photo by MK DB]

South Korean conglomerates saw production rates fall over 2 percentage points on-year to below 80 percent in the third quarter this year. Although their production capacities expanded through facility investments, production did not increase amid economic slowdowns.

According to corporate data tracker Leaders Index’s examination of 200 top firms that disclosed their operational rates, the average rate was 78.4 percent in the third quarter, 2.1 percentage points down from a year ago. The figure was 1 percentage point lower than in the same period in 2020 when the pandemic hit hard the nation’s economy.

All industries, except the automobile and pharmaceutical sectors, were on a downward track, with the largest drops in construction materials and shipbuilding/ mechanical equipment. Construction materials dropped 7.4 percentage points to 70.5 percent, mainly due to the weak property market. Shipbuilding/ machinery equipment was also down by 7.4 percentage points, followed by energy (6.4%). Petrochemicals (5.4%). Logistics (3.2%), steel (2.5%), and IT/electrical electronics (2.2%). Despite external challenges, automobile/ auto parts and pharmaceuticals saw their operating rates rise by 2.5 percentage points and 0.8 percentage point, respectively. Although firms, such as Aekyung Chemical and construction material manufacturer Eugene Corp., saw their operation rates drop by more than 20 percentage points, others, such as SK energy, KG ETS, and KG Steel, recorded double-digit growth. Although 93 companies increased their production capacities in the third quarter, only 69 of them saw an increase in production.