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(Last updated: 25 Jan 2008)
Trends and opportunities
The market
The Korean Government is firmly committed to the biotechnology sector with a recent announcement by the Ministry of Commerce, Industry and Energy that US$1.35 billion would be invested.
This is additional funds to state-based R&D projects valued at US$9.2 billion and raising another US$22 billion through issuing state based bonds to foster the commercialisation of next generation technologies, particularly biotechnology.
This excludes measures such as establishing world-class research institutions, such as MOGAM Biotechnology Research Centre and POSTECH Biotech Centre.
The leading private company groups also established their biotechnology companies to pursue the business opportunities. Academic or research institutes' engagement in the bio research is active.
Leading companies include:
- LG Life Sciences – develops new drugs for the global market and has joint development projects with Parke-Davis & Yamanochi of Japan.
- Regen Biotech
- Labfrontier
- Crystal Genomics
- INbionet
It is estimated that there are more than 600 biotechnology companies in Korea with over 170 R&D companies and 430 sales companies. Out of 600+ biotechnology companies in Korea, 61 per cent are biopharmaceuticals and 39 per cent non-biopharmaceuticals such as bio foods, bio chemicals, bio environments, bio energy and resources, bio process and bio equipment, and bio electronics and bioinformatics.
Opportunities
Korea’s mid-term and next generation project will be focused on:
- Development of therapeutic protein by animal cell culture
- Development of biomaterial by intelligence-type bioinformatics
- Development of gene therapy for incurable disease
- Mass production of protein-DNA chip system
- Development of high value protein
Growth engine projects include new bio-drug, artificial organ and bio-chip:
- Immunomodulator
- Drug delivery system
- Gene therapy
- Cell therapy
- cGMP technology
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Tariffs, regulations and customs
Korea's regulations, tariffs and quotas for imported products are based on the Harmonised Commodity Description and Coding System (HS code). Duty rate and import regulations vary according to the HS code where the product is classified.
Usually pharmaceutical products and medical devices carry zero to eight per cent duty rate and different regulations, where necessary. For further information, please visit Korea Customs Office.
Industry standards
The Korea Food and Drug Administration (KFDA) is the regulatory agency for food, drug and other cosmetic products in Korea. KFDA establishes policies with regards to food, food additives, genetically modified food, medical devices, cosmetics, and biological products.
The Division of Biotechnology of the Biologics Evaluation Department supervises biomedical products. The division is involved with:
- Planning of safety management of biological products
- Supervision on manufacturing and import permission of biological products
- Evaluation of specifications and test methods for biotechnological products
- Lot release tests of recombinant vaccines
- Research on the quality control of biotechnological products
- Permission of therapeutic products based on cell and gene
- Enactment and revision of regulations on clinical test of cell and gene therapeutic products
- Safety management of body tissues
The regulations and import permission procedures of imported biological products vary based on the classification of the product. |
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Marketing your products and services
Market entry
There are various options for establishing a direct market presence in Korea:
- License agreement: Finding a right distributor and making a license agreement is the most common and a safe way. However, finding a right partner who understands both the product and market and has well-established network is a key to success.
- Representative (liaison) office, ie. consider setting up basic connections in Korea. Major work can include market information gathering, promotions, and liason with government officers. However, a representative office is not permitted to undertake trading in Korea.
- Joint venture is one of the most common ways to enter Korea. Two or more investors share the ownership and control over the property (including IP) and operation.
- Acquisition/merger is a faster way to enter Korea. Purchase the whole or part of a local company, which can access the market immediately. Care needs to be taken to assess the quality of the entity/or IP and possible acquisition issues such as debts, personnel issues, company images, and market trends.
- Wholly Owned Foreign Enterprise (WOFE) is 100 per cent owned by the foreign investor. The number of WOFE's in Korea is increasing, particularly in the hi-tech parks where services are more sophisticated and local governments tend to be easier to deal with.
There are advantages and disadvantages associated with each of the above options. Selecting the right option will depend on a firm's product or services, the characteristics of the market and the local situation.
Most Korean biotechnology companies, R&D institutes, and academia have a tendency to seek collaborations with US companies rather than Australian companies due to their close relationships from an educational background.
To promote the Australian biotechnology industry in Korea, Australian biotechnology companies should consider providing more opportunities for Korean companies to experience Australia’s advanced technology by attending Australian biotechnology seminars and conferences. It is possible to promote these events through newsletters of major industry associations or seminars and conferences held regularly by scientific societies.
To successfully market your products or services in the Korean biotechnology sector, consider:
- Participating in biotechnology events in Korea
- Strategising market entry plan
- Finding a suitable business partner
- Building relationships with key persons in the industry
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Contact details
The Australian Trade Commission (Austrade) is the Australian Government’s trade and investment development agency, operating as a statutory agency within the Foreign Affairs and Trade portfolio.
Austrade assists Australian businesses contribute to national prosperity by succeeding in trade and investment, internationally, and promoting and supporting productive foreign investment into Australia.
Austrade:
- Delivers services that assist Australian businesses initiate, sustain and grow trade and outward investment.
- Promotes Australia as an inward investment destination and, with the States and Territories, supports the inflow of productive foreign direct investment.
- Administers the Export Market Development Grants scheme.
- Undertakes initiatives designed to improve community awareness of, and commitment to, international trade and investment.
- Provides advice to the Australian Government on its trade and investment development activities.
- Delivers consular, passport and other government services in designated overseas locations.
A list of Austrade offices (in alphabetical order of country) is available.
More information
For further information please contact Austrade on 13 28 78 or email info@austrade.gov.au |
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