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Concerns about South Korea’s economy are deepening as the novel coronavirus continues to spread. In addition to many domestic factories shutting down after employees have been diagnosed with the virus, companies are taking additional hits from constraints on overseas business travel.

On Mar. 2, Samsung Electronics announced its fourth confirmed coronavirus patient had been discovered at its smartphone factory in Gumi, North Gyeongsang Province. The additional case emerged after factory operations at it first Gumi factory were suspended from Feb. 22 to 24 following a prior discovery of a confirmed infection. Factory operations were halted through the evening of Mar. 1 after the confirmation of a coronavirus infection at its second Gumi factory on Feb. 29. The factory had been operating normally until then, as the fourth patient did not work on the production line. Disease control measures were previously implemented on Feb. 28 following the confirmed diagnosis of a network project division employee at the first Gumi factory.

Outside of the Daegu/North Gyeongsang region, a partner company employee at the companys’ Giheung factory in Gyeonggi Province was diagnosed on Feb. 29, resulting in the cafeteria where they worked being shut down through Mar. 2.

LG Display’s module factory in Gumi was also closed through Mar. 2 after an employee at a bank in the facility was diagnosed with the coronavirus. LG Innotek’s camera module production factory remained closed through Mar. 2 after the coronavirus diagnosis of an employee at the company’s Gumi plant on Mar. 1. Major companies have been hit particularly hard by the coronavirus due to the heavy concentration of factories in Gumi and elsewhere in North Gyeongsang Province.

At Hyundai Motor, operations at the automaker’s second factory in Ulsan were suspended for a day after the coronavirus diagnosis of an employee on Feb. 28. With the factory producing an average of 1,000 Genesis GV80, Palisade, and other major vehicles per day, the closure is expected to cause as much as 30 billion won (US$25.14 million) in losses. While the Ulsan factory has thermal imaging cameras installed to detect body temperature changes for all persons entering and exiting the factory, no fever was detected in the diagnosed employee. On Feb. 21, Hyundai’s fourth Ulsan factory suspended operations for a day when a partner company employee’s coronavirus diagnosis led to difficulties with parts supplies.

Samsung Electronics’ Gumi factories

Meanwhile, retailers have been facing dozens of store closures. As of Mar. 2, a total of 12 Lotte Department Store branches, 16 E-mart branches, 15 Lotte Mart branches, and four Shinsegae Department Store branches had been closed due to reasons including visits by coronavirus patients.

Another big concern for businesses has been the restriction of overseas business travel. In addition to the multiple existing difficulties in transactions with Chinese businesses, company business travel has been hampered with Vietnam’s decision to disallow visa-free entry to South Korean nationals as of Feb. 29.

“We’re working to prevent problems in our business by increasing the amount of video conferencing and online communication,” said an official at one business with a factory in Vietnam. Samsung Electronics canceled an R&D center groundbreaking ceremony that had been scheduled to take place in Hanoi on Feb. 29.

The ongoing difficulties have prompted the Korea International Trade Association (KITA) to undertake support measures for “untact [a Konglish term meaning ‘no contact’] marketing,” which basically refers to selling products without face-to-face contact. The move was made on the determination that small businesses in particular are suffering a major blow due to the cancellation of MWC and other overseas trade fairs that offer opportunities to meet with buyers, as well as the cancellation of South Korea visits by overseas business representatives. Those who apply by Mar. 6 can receive support funds for foreign-language catalogue and foreign-language product video production.

By Song Gyung-hwa, staff reporter

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