The number of South Korean companies with revenue of more than 1 trillion won ($867 million) has doubled over the last two decades, although the growth has slowed in recent years, latest data showed Tuesday.
The findings were disclosed in a study by Sustainable Growth Institute which surveyed large domestic companies between 1998 and 2018 to gauge the health of Korea’s economy.
According to the report, the number of firms with sales of more than 1 trillion won increased from 83 to 197 during the period. Their combined sales also rose from 375 trillion won to 1,283 trillion won.
The growth, however, slowed during the 2012-2018 period, with the number of new entries in the exclusive club and the combined sales flattening out. Sales grew on an average of 16.7 percent between 1998 and 2012 while they rose 0.4 percent between 2012 and 2018, the report said.
“This indicates that large companies have reached their optimum growth limits,” said SGI CEO Shin Kyung-soo.
“Korea’s economy can create the second economic boom when more companies generate more than 1 trillion won sales through industry convergence and new growth engines,” he said.
In 1998, the finance industry had 21 companies in the club, the largest number among all sectors. The construction industry followed with nine companies and electronics (eight). Petrochemicals and oil had seven companies while the food industry had six firms.
In 2018, the banking industry was still the largest in the club with 29 companies.
The number of petrochemical companies increased to 23 -- including Huvis, Isu Chemical, Nam Hae Chemical and KCC. The food industry had 19 lucrative firms – including CJ CheilJedang, Lotte Chilsung Beverage, Daesang, Ottogi, Nongshim and Samyang.
Electronics and construction had 17 and 16 companies, respectively, while the auto sector had 13 enterprises. Retail firms increased from two to 11 during the period.
A total of 50 companies joined the club for 20 straight years. The figure accounted for 2 percent of the total 2,300 listed companies in 2018. They include Hanwha Life Insurance, KT, S-Oil, Hyundai Engineering & Construction, Korean Air, Samsung Heavy Industries and Lotte Shopping.
There are only four companies that saw revenue of more than 10 trillion won for 21 consecutive years since 1988.
Sales of Samsung Electronics surged from 20 trillion won in 1988 to 170 trillion won in 2018. Samsung Life Insurance saw revenue rise from 19 trillion won to 27 trillion won. Posco increased its sales from 11 trillion won to 30 trillion won, while that of Korea Electric Power Corp. went up from 14 trillion won to 60 trillion won.
By Shin Ji-hye (email@example.com)