Shipbuilding the biggest beneficiary from falling won

The values of the won and the yen have dropped drastically and in unison. If currencies fluctuated sharply in the past, what caught one's eyes was profit reflected from a strong yen or domestic economy changes with the won falling. The current won and yen depreciation, however, drove the Korean economy into such a strange situation in the connection with U.S economy soft-landing and Japanese economy crisis. What different situations will appear under the influence of the currency's depreciation is at the center of public interest.

The Federation of Korean Industries (FKI) analyzed through its research that the recent weakening of the won and yen would positively affect shipbuilding, cars, and semi-conductors, the main export-oriented industries in Korea.

The FKI also pointed out that won's depreciation reaching the 1,300 won to dollar barrier gives more money to shipbuilders in sales and operating profits. Most shipyards set basic exchange rates between 1050 and 1150 won earlier this year.

Meanwhile, the won and yen seem not to cause the two countries to compete for receiving orders. Both countries have already secured two and half to three years of work. It is also predicted that global orders will reach only half that of the previous year. In addition, receiving orders used to decide on which company could satisfy the model ship owners presented, rather than the price, shipbuilders said.

Overseas construction and engineering will not be greatly affected by the Korean currency's depreciation.

On the other hand, steel manufacturers, petro- chemical producers, and sugar makers will have some difficulties under the won's depreciation. The won's falling is expected to cost those industries more money for raw imported materials and foreign debt payments.

The refinery, aviation, and electricity industries will receive little in the way of positive effects from the won's depreciation, but will most likely suffer losses from currency fluctuation.