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.
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