- MOTIE leads public-private efforts to bolster supply chain response system 2022-05-02
Ministry of Trade, Industry and Energy (MOTIE)’s Trade Minister Yeo Han-koo visited the Global Supply Chain Analysis Center (hereinafter "Analysis Center") on April 29 to assess the supply chain status amidst China’s zero-COVID lockdowns and Russia-Ukraine situation so as to invigorate public-private joint efforts for stronger supply chain intelligence and countermeasures.
The Analysis Center was launched on February 9 of 2022 by MOTIE, Korea International Trade Association (KITA), and Korea Trade-Investment Promotion Agency (KOTRA).
The focus of the meeting was on the recent China and Ukraine-Russia situation, and how they are impacting domestic industries.
China’s Shanghai lockdown has now extended to over a month since March 28, and despite the Chinese government’s endeavors to restart industrial and corporate operations, prolonged lockdown is considered inevitable in view of local quarantine and logistics conditions.
The supply stream of parts originating from Shanghai is clotted and causing Korea’s domestic finished car production lines to flounder. Since the Jiangsu region near Shanghai is home to various Korean semiconductors, batteries, and automobiles manufacturing plants, supply chain issues are critical. China’s International Workers’ Holidays (April 30-May 4) are deemed likely to bring further spread of the pandemic and hence, trigger the authorities to widen lockdowns.
With Russia’s invasion of Ukraine now stretching over two months, raw materials supply risks and soaring prices are an added burden to Korea's domestic businesses. One of the biggest breadbaskets in the world, Ukraine’s lagging spring sowing in its black soil regions is leading speculators to forecast poor autumn harvesting and agflation. Adding tension to the food security strain, Indonesia has announced a nationwide ban on palm oil exports starting April 28.
As for the role of the Analysis Center on breaking down major issues and swiftly feeding information to relevant businesses, meeting attendees concurred that its performance was satisfactory.
The Analysis Center works with 30 plus institutions in Korea to dissect supply chain issues and promptly send out warning reports and countermeasures on sensing abnormalities, done mostly in conjunction with the Early Warning System (EWS). Beginning March 3, the Analysis Center has been releasing supply chain analysis publications every Thursday and sending them to over 150,000 companies via email and social media platforms.
The Analysis Center is considering broadening the area of services from manufacturing to food and other relevant sectors, and requests have been made for the Government to extend support to sourcing alternative supply channels and overseas resources development through cooperation with general trading companies and private businesses.
Trade Minister Yeo expressed anticipation of the Analysis Center fulfilling its role as the hub of supply chain response, based on close networking among companies, committees and R&D institutions. He also stressed that “the Ministry plans to establish a supply chain network with countries rich in critical minerals for stabilizing raw materials sourcing, and the upcoming IPEF and FTAs will be leveraged to bolster supply chain partnerships.” To this end, he urged Korean companies to actively participate in the various grant and assistance programs currently run by ministries and relevant institutions.