He warned Tokyo that Seoul won't be defeated again and vowed full efforts to catch up with the neighboring country economically.

He stressed that the ongoing trade row can be an opportunity for some of South Korea's industries, which have heavily depended on supplies from Japan, to raise their own competitiveness or diversify foreign contractors.

Talking with workers at the company, Moon pointed out that South Korea is No. 1 in terms of taking advantage of robotics technology in the manufacturing sector.

"While we use lots of robots, the reality is that the localization rate of robot parts and materials is still not high," he said, adding that the firm has great growth potential in that sense.

He said the government will try to allocate more funding to R&D for small and medium-sized enterprises.

Last week, Japan's Cabinet went ahead with the approval of plans to expel South Korea from the so-called whitelist of favored trade partners in apparent reprisal for Seoul's attitude on the wartime forced labor issue.

Hours ahead of Moon's tour of the company, Japan's Ministry of Economy, Trade and Industry promulgated a related amendment to the Export Trade Management Ordinance.

South Korea has been categorized into the Group B of nations subject to a case-by-case review of offers to buy strategically sensitive components and other materials. The measure is to take effect on Aug. 28.

Moon emphasized that the "unjustifiable" nature of Japan's removal of South Korea from the so-called white nation list is a matter to take issue with.

"Separately, however, I believe that our people and companies will further develop our economy and industries by making this incident a chance to turn a misfortune into a blessing," he added.

The trade skirmish with Japan has served as a reminder of the importance of technology power for a country's economy and the value of local materials-producing firms, especially small but strong ones, Moon said.

South Korea's businesses, including conglomerates, have relied much on Japan to obtain many high-tech materials in consideration of not just quality but also the speed and stability in supplies.

The Shinzo Abe administration's decision, however, revealed the venerability, uncertainty and instability in trade with Japan.

SBB TECH, founded in 1993, posted 9.2 billion won ($7.5 million) in sales last year. With only 84 employees, it has developed robot-use harmonic decelerator technology for the first time in South Korea.

However, conglomerates here have continued to import the component from Japan.

Alerted by Japan's export curbs, the Moon government plans to expand support for local firms to develop technologies and mass-produce high-tech materials. (Yonhap)