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Non-chaebol firms losing ground to chaebol in S. Korea

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(Globalpost/GlobalPost)

SEOUL, July 3 (Yonhap) -- A small number of firms unaffiliated with South Korea's conglomerates joined the ranks of the country's top 500 companies in terms of sales in the two decades after their foundation, data showed Wednesday.

CEO Score, a website that tracks conglomerates, known here as chaebol, as well as financial firms and state-run companies, said only 13 independent companies are ranked among the top 500 local companies in the 20-year period.

The 13 companies include South Korea's top portal operator NHN Corp., the country's largest game maker Nexon and NCsoft Corp., a leading South Korean online game developer.

Seventy-two affiliates of South Korea's 33 major conglomerates appeared on the list of the 500 largest companies during the cited period, according to the website.

Hyundai Motor Group saw eight of its units, including logistics service provider Hyundai Glovis Co., make the list, said CEO Score.

Hyundai Motor Group is followed by SK Group, South Korea's third-largest conglomerate whose businesses range from mobile communications to oil refinery. The website said six units of SK Group, including high-speed Internet service provider SK Broadband Co., appeared on the list.

CEO Score said five units of Samsung Group also appeared on the list of the 500 largest companies. Samsung Group is South Korea's largest family-controlled conglomerate and one of its businesses is Samsung Electronics Co., the world's top maker of smartphones.

The development underscored the challenges facing local startups in a country where family-controlled chaebol dominate lucrative businesses and strengthen their business ties through their inter-affiliate trading.

"It's fair to say that there is little chance that independent companies can be created and grow as units of chaebol, like tentacles of an octopus, dominate the industrial ecosystem," CEO Score said.

President Park Geun-hye has vowed to rein in the economic dominance of chaebol and shift the economy from one that relies heavily on the exports of large conglomerates to one in which both big and small firms coexist.

Small and medium companies account for 99 percent of all enterprises and 88 percent of all employees in South Korea.

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http://www.globalpost.com/dispatch/news/yonhap-news-agency/130703/non-chaebol-firms-losing-ground-chaebol-s-korea