Recent gross profit margin percentages (GPM %) for 14 large and mid-size South Korean chemical companies have been computed to be on average 17%. 2012 sales for these companies ranged from approximately 575 million to 36 billion US dollars. The gross profit and revenue amounts used to determine the 17 GPM % average were obtained from the companies’ websites. The South Korean chemical companies are all listed on the Koran Stock Exchange as chemical companies. Click here to go to the Korean Stock Exchange website and to find stocks listed as chemical companies.
The 17% GPM % is low when compared to an average GPM % for US chemical companies. For example, in a blog I wrote in December 2013, I indicated that a recent average GPM % for 27 US companies (small, mid-size, and large) is 28%. Click here to read this December 2013 blog. If correct, such a large difference in GPM % between South Korean and US chemical companies suggest that on average US chemical companies are much more profitable.
An explanation for the large GPM % difference might be that the costs of raw materials from which chemical products are produced are much higher in South Korea. This is consistent with South Korea’s lack of chemical product-related natural resources. Another reason might be South Korean chemical companies are not able to demand higher prices from their customers.