Leading South Korean firms are staying vigilant to any potential business repercussions from the escalating dispute between Israel and Palestinian Islamist group Hamas, according to industry sources on Monday. No harm has been reported yet among the companies operating in the Middle East.
Samsung Electronics Co. and LG Electronics Inc., which both have operations in Israel, have implemented remote work plans for their employees in the area and are frequently assessing the safety of their personnel. Samsung has a research and development (R&D) center and a separate research institute in the country, and Chairman Lee Jae-yong visited the R&D center last month to be briefed on the company’s investments in advanced technologies.
LG Electronics runs a local sales branch in Tel Aviv and also acquired a controlling stake in Israeli automotive cybersecurity firm Cybellum in 2021. Hyundai Motor Co. and its subsidiary Kia Corp., who dominate the Israeli auto market, are also “closely observing the local situation,” according to the companies’ representatives. There are worries that a prolonged conflict could adversely affect the automakers’ sales in Israel.
Korean Air Co., South Korea’s leading airline, has canceled its flights from Incheon to Tel Aviv this week due to safety concerns. However, it has kept in place the flights that transport passengers from Tel Aviv to Incheon and is deciding whether to operate the return flights after evaluating the airport situation in Tel Aviv.
Local oil refiners are also keeping a close watch on the Middle Eastern situation. Market analysts have said that the refining industry could potentially benefit from a temporary rise in international oil prices if the conflict ends up boosting them. But a prolonged conflict could reduce demand and have a negative effect on net earnings.
South Korean builders with projects in nearby countries in the Middle East are also on alert. A construction industry representative said that the industry is “observing the situation for now,” and that the sense of crisis in the Middle East is not favorable.