Samsung Electronics and Posco are the only South Korean companies to record an operating profit of 1 trillion won ($858 million) for more than 20 years, latest data showed Wednesday.
A new study by the Sustainable Growth Institute surveyed changes in operating profit of Korean companies between 1998 and 2018.
The number of companies with an operating profit exceeding 1 trillion won stood at 18 in 2018, up from four in 1998, the survey found. The growth, however, has halted since 2010 when the number reached 22.
As for companies with an operating profit of more than 100 billion won, the number stood at 106 in 2018, up from 40 in 1998. The growth has also stagnated since 2010 when the number was 118.
“The large Korean corporations faced structural limitations to their growth over time due to more competitive prices, higher labor costs and lower productivity,” said SGI CEO Shin Kyung-soo.
Samsung and Posco were the only companies that have recorded more than 10 trillion won in sales and 1 trillion won in operating profit for 21 straight years.
Samsung has generated an operating profit of 12 trillion won on average a year while Posco has posted an average of 3 trillion won since 1998.
Naver, Lotte Chemical, KT&G and Korea Gas Corp. have newly joined the club over the past 10 years.
“In the future, it is necessary to focus on high value-added industries such as artificial intelligence, robots, biotechnology and future mobility to strengthen their capacity,” Shin said.
By Shin Ji-hye (firstname.lastname@example.org)