On December 28, the Small and Medium Business Administration (SMBA) announced that 202 products, including personal computers (desktop PCs), have been designated as competitive products among SMEs, effective from 2013. The products designated as competitive products among SMEs will be restricted from being supplied to the public market by large companies for three years, and 495 public institutions and affiliated organizations, including central ministries, local governments, and public corporations, will be required to sign procurement contracts with SMEs that directly produce the products when purchasing them.

The SME-to-SME Competitive Product Designation System is a system that excludes large companies from participating in public market procurement for products that are directly produced by 10 or more SMEs in Korea and have an annual purchase volume of 1 billion won or more for public institutions, and the designation is valid for three years. Currently, competitive products among SMEs are designated and announced by the Small and Medium Business Administration in accordance with Article 6 of the Act on Promotion of SME Product Purchase and Sales Support and Article 6 of the Enforcement Decree of the same Act.

Elevators have been designated as competitive products among SMEs since 2006 and have been an important means of securing sales for SMEs, and on December 4, even passenger elevators with a speed of 105m/min or less were designated and confirmed as competitive products among SMEs, which is expected to give the elevator SMEs more breathing room in the future.

The first credit for this selection goes to the Korea Elevator Industry Cooperative (Chairman Kim Seung-ho, hereinafter referred to as the cooperative). In particular, Chairman Kim Seung-ho has been working for more than a year to develop the SME industry and protect the rights and interests of its members, and has been working to prevent related agencies such as the Ministry of the Interior and Safety, Ministry of Land, Infrastructure, and Transport, and the Small and Medium Business Administration from designating passenger elevators with speeds of 105m/min or less as competitive products among SMEs.

In fact, the union has been making continuous efforts to expand the scope of application (speed 90m/min→105m/min) as the collective number contract was abolished in 2006 and the designation system for competitive products among SMEs was applied. With this expansion, the union expects to not only support the sales of elevator SMEs, but also contribute to promoting technological innovation through competition among SMEs.

However, the problems are not overwhelming. For the next three years, we need to quickly prepare for image renewal, such as the poor financial structure and business environment of SMEs and the lack of internal capabilities. We spoke with Kim Seung-ho, chairman of the Korea Elevator Industry Cooperative, who is reorganizing the cooperative in the new year, about his resolutions for the year ahead.

For the past year, I have been making great efforts to designate passenger elevators with a speed of 105 meters or less as a competitive product among SMEs.

After visiting the Public Procurement and Market Support Division of the Small and Medium Business Administration as well as the Construction Economy Division of the Ministry of Land, Infrastructure, and Transport and the Industrial Economy Division of the Ministry of Strategy and Finance to explain the reality of the domestic elevator industry and the necessity and justification for the designation of passenger elevators with a speed of 105 meters per minute or less, which was newly applied for in 2013, and requesting active support and cooperation, I was designated as a competitive product among SMEs at the Deliberation Committee on the Designation of Competitive Products among SMEs held on December 4.

Although the relevant agencies were concerned about the lower technology and brand name value of SMEs compared to large companies, we were able to find a compromise by presenting the performance and technology status data of elevator SMEs. Of course, the SMEs should also take this opportunity to look for ways to improve and optimize their organization, manpower, and funds so that they can survive in the future.

 

Currently, there are about 66 member companies that have been confirmed to directly produce competitive products among SMEs. Not all of them will be able to bid for this year's volume, so they need to make self-motivated efforts to deliver good products in a timely manner in line with the SME development policy. Of course, the union should also conduct regular technical training and implement a stricter direct production survey to select companies that can instill a good image to consumers and raise the status of the union.

As an organization representing the domestic elevator SMEs, the union will continue to develop policies and improve the system to resolve the issues faced by its members, as well as actively promote related projects such as developing excellent products to expand the elevator market and group standardization projects to protect the rights and interests of its members and develop the elevator industry.

 

While leading the selection process, I have reduced the low brand awareness of SMEs' products. We will continue to develop technologies for joint purchasing, joint production, and joint sales this year. We are also looking forward to launching products under a joint trademark (tentatively titled 'Cosmos').

Lastly, this year is the first year that related revised laws such as the Boarding Act will be applied. While there is still a lot of confusion in the industry as well as our members, we plan to work together to ensure that our members are not disadvantaged by carefully understanding the new provisions, especially those related to factory registration, repair business registration, equipment and labor standards.