Factory utilization rate of large Korean manufacturers slip below 80% H1

2019.09.04 14:15:31

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Factories of Korea’s biggest manufacturers have been running more than 20 percent below their full capacity this year as the result of fizzling-out in chip boom cycle and softening in IT and electronics demand around the globe.

The average capacity utilization ratio of factories stood at 78.80 percent in the January-June period, down from 80.97 percent a year ago, according to the data compiled by industry tracker CEO Score based on the half-year business reports from 143 manufacturers with available information among the country’s top 500 companies.

Production capacity increased by 2.75 percent due to their expansion since last year, but output increase stopped at a marginal 0.13 percent.

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By industry, the average capacity utilization ratio of factories in the IT, electronics and electricity sector fell by 8.86 percentage points to 78.68 percent in the first six months from a year ago. The figure for petrochemicals (-3.84 points), steel (-2.6 points), food and beverage (-0.74 points) sectors also declined while the measure for pharmaceutical (2.94 points), construction materials (1.17 points), living supplies (0.81 points), auto parts (0.07 points), shipbuilding, machinery and equipment (0.07 points) sectors edged up.

Semiconductor and display equipment maker Semes bore the most dramatic change of fortune with its utilization ratio sinking to 32.53 percent from 94.85 percent a year ago.

Kolmar Korea, which came under fire for pro-Japanese and sexist comment from its CEO, suffered a 22.61 percentage point fall in factory operation rate to 53.47 percent. Other major losers were Hanwha Total (-20.43 points), Hyundai Construction Equipment (18.50 points), Taihan Electric Wire (-18.42 points) and LS I&D (-18.42 points). In contrast, the factory utilization rate of Pan-Pacific gained by 38.59 points to 54.40 percent along with Hyundai Samho Heavy Industries (19.33 points), Daewoog Pharm (18.92 points), Ottogi (15.03 points), Hyundai Mipo Dockyard (14.40 points) and LG Electronics (12.51 points).

By Lim Hyung-joon and Minu Kim

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