The Middle East tension is affecting small and medium enterprises (SMEs) in South Korea that depend on the region for aluminium and naptha. A report says these firms need support to manage raw material supply and exports.

SMEs do not import much overall from the Middle East, but they depend on it for some key materials. According to a report by The Small and Medium Venture Business Research Institute, about 82.8 per cent of naphtha imports come from countries like Kuwait, the UAE and Qatar. Some aluminium products also rely on the region, including scrap (11.2 per cent) and non-alloy ingots (8.8 per cent). This creates a risk of supply problems.

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SMEs are also more exposed on the export side. About 5.4 per cent of their exports go to the Middle East, compared to 2.9 per cent for all companies. Around 13,859 SMEs export to the region, making up 14.2 per cent of such firms. Main export items include cosmetics, used cars, auto parts and gold products.

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Costs have increased due to higher oil prices, transport charges and exchange rate changes. At the same time, supply disruptions and delays are affecting trade. Many firms are unable to raise prices because demand is weak. This has led to fewer orders, payment delays and shipping issues.

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The report says SMEs are facing growing financial pressure. It suggests policy support is needed to ensure a stable supply of raw materials. It also recommends finding new suppliers and expanding exports to other regions. Deputy researcher Shin Min-i of The Korean SMEs and Startups Institute (KOSI) said, “It is necessary to consider strategic stockpiling of raw materials, securing alternative supply sources and supporting entry into new markets such as the Global South.”