Kuwait-Korea SME Cooperation Mar. 27, 2007

1. Kuwait-Korea SME CooperationMar. 27, 2007 Beom-Do HEO, Ph.D CEO, Small Business Corporation

2. Trade & Investment between Kuwait and Korea 1 Contents SME Cooperation between Kuwait and Korea 2 SME Cooperation Model 3 The Status of Korean SMEs 4 Company Logo

3. I. Trade & Investment between Kuwait and Korea Kuwait-Korea Economic Cooperation Relation Company Logo

4. I. Trade & Investment between Kuwait and Korea Complementary Economic Relation Kuwait Solidifying national efforts to openmarkets and reorganize theindustrial structure, fueled byoil price run-up Korea Utilizing the construction industry’s regional experience in 80s and its advanced technology Company Logo

5. I. Trade & Investment between Kuwait and Korea Complementary Industrial Structure Kuwait Centralized in the energy industry, imports in the manufacturing sector Korea Centralized in the manufacturing industry, energy imports Company Logo

6. I. Trade & Investment between Kuwait and Korea Kuwait → Korea : 56th Export / 10th Import partner (’06) Korea → Kuwait : 2nd Export / 10th Import partner (’05) Growing Economic Partnership Kuwait Export : $418mil.(’04) → $669mil.(’06) (60% ∆) Korean Export : $3.831bil.(’04) → $8.133bil.(’06) (112.3% ∆) Major Business Items Kuwait Export : Mineral fuel such as crude oil (99.4%), Korean Export : Vehicles/Ship construction parts (60%), Steel products(13.3%), etc. 2. Trade Company Logo

7. 2001 2001 2002 2002 2003 2003 2004 2004 2005 2005 2006 2006 Total Total Case Case - - - - - 2 1 - - 1 - 2 4 2 Amount Amount - - - - 3,181 - - 180 - 424 903 - 1,507 3,181 I. Trade & Investment between Kuwait and Korea 3. Investment Investment into Kuwait (Unit : USD1,000) Investment into Korea (Unit : USD1,000) Company Logo

8. II. SME Cooperation between Kuwait and Korea 1. Common Areas of Investment - Extension of SOC and IT infrastructure development for future economic growth - PromotingSMEs for job creation(especially for younger generations) and as a base extension of industry Infrastructure Investment and Manpower development to increase industrial competitiveness Company Logo

9. II. SME Cooperation between Kuwait and Korea 1. Common Areas of Investment - Expanding investment in the petrochemical industry based on oil and gas - Focusing on investment in IT, finance, logistics, and distribution sectors * IT industry : Great potential for strategic partnership with Korean SMEs Exploring next generation Industries through diversification Company Logo

10. II. SME Cooperation between Kuwait and Korea Infrastructure construction to support advanced industries - Grafting together Korean SMEs’ commercialization techniques and the know-how with e-government and information-society creation * Cooperation is available in the IT infrastructure sector such as PC supply, fiber-cable construction, mobile communication services, and solution development for e-governments. - Train IT skilled technical hands to apply commercialization techniques and know-how : possibility to solve the younger generation’s unemployment problems 2. Areas of Potential Cooperation Company Logo

11. II. SME Cooperation between Kuwait and Korea Activation of package style technology transfers between SMEs of the two countries - Transfer composition technology of large Korean enterprises & SMEs such as plant engineering, manufacturing technology in high value added sectors, system construction, etc. * Main fields Machinery, architecture and construction materials, etc. 2. Areas of Potential Cooperation Company Logo

12. II. SME Cooperation between Kuwait and Korea Jointly participate in internal and external projects through combination of “Kuwait capital & Korean venture businesses’ advanced technology” - Kuwait’s financial investment into Korean venture businesses * Expect high investment returns through participation of project cooperation in GCC (Gulf Cooperation Council) 2. Areas of Potential Cooperation Company Logo

13. II. SME Cooperation between Kuwait and Korea Strengthening cooperation network between governments and SMEs in two countries - Increasing cultural awareness through personal exchanges between the two countries’ governments and SMEs * Transfer specialized know-how of Korean economic development experience and manufacturing industry * Extension of training for public officials and entrepreneurs - Extension of business opportunities between the two countries’ SMEs * Strengthen the match-making services for enterprises hoping to expand businesses into the two countries * Expand business opportunities by holding seminars and exhibitions of SME-made products 2. Areas of Potential Cooperation Company Logo

14. 3,000M SUCCESS Survival Rate (40-50%) 2,000M Survival Rate (90%) 1,000M T P M III. SME Cooperation Model between Kuwait and Korea Strategy for Success (TPM) Survival Rate (5-10%) Technology Production Marketing Company Logo

15. III. SME Cooperation Model between Kuwait and Korea Package Style Cooperation Model Case 1. Sabya fresh water plant business Kuwait Korea Kuwait + Korea Consortium Composition Developers, Manufacturers, Banks, etc. • Doosan Heavy Industries & Construction tender, order • Numberof participating SMEs : 30 companies Parts (motors, valves, etc.) Public & Private Plant business order Technical tie-up(T) → Local production(P) → New market development(M) SME Cooperation Model between two countries (Kuwait Capital & Korean Technology) • Establish joint venture company for local production of motors, valves, etc. • Transfer of manufacturing technology and production know-how • Development of regional public market in domestic or GCC (Gulf Cooperation Council) area Company Logo

16. III. SME Cooperation Model between Kuwait and Korea Package Style Cooperation Model Case 2. Abdullah Building Construction Project Kuwait Korea Info & Tech Co-op Project Jason Co., Ltd. Group Equipment offer + Technical support Consortium composition (banking, construction, etc.) Kuwait Trading Firm Construction bid information offer Technical tie-up(T) → Local production(P) SME Cooperation Model between two countries (Info. + Technical Cooperation) • Established local joint venture company, “Gulf Korea”, which does local order information monitoring • Develop new concept of technical cooperation projects Creation of high value added businesses :establish joint assembly factory for construction materials Company Logo

17. III. SME Cooperation Model between Kuwait and Korea Package Style Cooperation Model Case 3. Other Middle East Model Equipment offer and technology transfer for factory construction of Iran natural gas stock containers NK Co., Ltd Propulsion of joint venture company producing concrete wooden stakes in Saudi railroad (1000km) construction Samsung Industry Co., Ltd Transfer of dust collecting and processing technology for Saudi cement plants extension Dongwoo Tech., Ltd Technical support for Egypt paper (newsprint) factory construction MES TECH Company Logo

18. Industry Small & Medium-sized Enterprises Employees Paid-in Capital / Revenue Manufacturing Below 300 8 billion won or less(Paid-in Capital) Transportation, Mining & Construction Below 300 3 billion won or less (Paid-in Capital) Retail, Hotel etc. Below 300 30 billion won or less (Revenue) Fishery, Film, Hospital etc. Below 200 20 billion won or less (Revenue) Wholesale, Service etc. Below 100 10 billion won or less (Revenue) Others Below 50 5 billon won or less IV. The Status of Korean SMEs 1. Definition of SMEs Company Logo

19. All: 3,204,809 SMEs: 3,203,437(99.9%) All: 19,147,471 SMEs: 13,352,193(88.1%) IV. The Status of Korean SMEs 2. Economic Importance of SMEs Company Logo

20. Export Year2005 Year 2004 Year 2003 Year 2002 Mil. US$ % Mil. US$ % Mil. US$ % Mil. US$ % Total 284,418 100 253,844 100 193,817 100 162,470 100 SMEs 92,128 32 90,384 36 81,698 42 68,307 42 IV. The Status of Korean SMEs 3. Export Performance of SMEs Company Logo

21. Invest-ment Year 2005 (Number of Projects) Year 2004 (Number of Projects) Year 2003 (Number of Projects) Year 2002 (Number of Projects) Mil. US$ % Mil. US$ % Mil. US$ % Mil. US$ % Total 6,469 (4,387) 100 5,980 (3,770) 100 4,048 (2,810) 100 3,689 (2,487) 100 SMEs 2,434 (1,637) 37 (37) 2,224 (1,700) 37 (45) 1,463 (1,689) 36 (60) 1,172 (1,554) 31 (62) IV. The Status of Korean SMEs 4. SMEs Overseas Investment Company Logo

22. IV. The Status of Korean SMEs 5. SME Policy Direction Encourage the growth of innovative SMEs Solutions for SME human resources shortage Innovate government procurement policies to diversify SME marketing channels Support growth potential through financial assistance Encourage a sustainable, mutually supportive business relationships between SMEs and larger corporations Dissemination of relevant policy information and provide trouble-shooting assistance Company Logo

23. IV. The Status of Korean SMEs 6. Small Business Corporation (SBC) Establishment : January, 1979 Organization - 17 departments, 1 center, 21 regional branches, 4 overseas offices, 15 KBDCs, 3 regional training centers SBC Invested Companies - Business Incubation Certification Center, Small Business Distribution Center, Korea Venture Investment Corporation Employees : 748 Budget : $6.9 billion (FY 2007, USD1=KRW950) Company Logo

24. IV. The Status of Korean SMEs 7. SBC Major Areas of Activity “Success Supporter” for SMEs Financial Assistance : loans, Investment Business Innovation - Corporate diagnosis & customized package support Training - Technical & management training ready for on-site application Marketing & International Cooperation - Create market opening through international network Information : related policy studies & evaluation Company Logo

25. IV. The Status of Korean SMEs 8. Development Points (2007) Expand Direct loans and loans without Collateral Further Support for SME global competitiveness Improve and standardize customized on-site service Internal innovation to improve customer satisfaction Company Logo

26. Thank You ! كراجزيلا