South Korea companies prepare for worst after Samsung coronavirus case

Workers wearing protective gear spray disinfectant at a market in Daegu, South Korea, on Feb 23, 2020 PHOTO: AFP

SEOUL (BLOOMBERG) - Samsung Electronics, LG Electronics and other companies in South Korea are taking precautions against the coronavirus after a rising number of cases in the country, including the infection of a Samsung employee at a local production facility.

The country's largest technology company shut down operations at a plant in Gumi City over the weekend after the employee tested positive for the virus, and said it planned to restart operations at Monday afternoon (Feb 24) local time. Samsung Electronics shares slid as much as 3 per cent in Seoul.

While the novel coronavirus originated in China, it is now spreading to other countries, including Korea with more than 800 confirmed cases. Companies from Japan to Singapore are taking steps to limit the spread among employees and within their facilities.

South Korea's Centers for Disease Control said Monday there are are 231 more virus cases, bringing the total to 833. The death toll rose by 2 to 7 people. The city of Daegu has seen a spike in case in recent days.

The won dropped to a six-month low and stocks plunged after South Korea raised its infectious-disease alert to the highest level as the coronavirus outbreak worsened.

The Samsung case is troubling because Gumi has a collection of facilities operated by Samsung, LG Electronics, LG Display, Toray Group and other companies. Samsung has two production lines in Gumi, about 200 kilometres (124 miles) south-east of Seoul, for some of its smartphones.

LG Electronics, which has TV plants in the Gumi industrial complex, told workers who commute from Daegu to work from home. LG Display has instructed workers who have visited the Daegu area to not come into the office for two weeks, while headquarters staff are restricted from visting the region without approval from management.

Samsung has shifted more than half of its smartphone production to Vietnam but still produces some of its premium models at the Gumi complex. The stoppage at the plant may affect production of Samsung's high-end models including the foldable Galaxy Z Flip and the Galaxy Fold.

Join ST's Telegram channel and get the latest breaking news delivered to you.