- 투자유치(영문) 메인>Information service>News
- 투자유치(영문) 메인>Information service>News
Gyeongsangbuk-do Signs Reshoring MoU with Aju Steel Co., Ltd. 상세내용
- Gyeongsangbuk-do Signs Reshoring MoU with Aju Steel Co., Ltd.
- 등록일2020-08-06 11:22:51
◦ On July 13, Gyeongsangbuk-do and Gimcheon City signed a reshoring* memorandum of erstanding (MoU) with Aju Steel Co., Ltd. before 20 representatives, including Gyeongsangbuk-do Governor Lee Cheol-woo, Gimcheon City Mayor Kim Chung-seop, Aju Steel Co., Ltd. CEO Lee Hak-yeon, as well as Na Gi-bo and Park Pan-su, members of the Provincial Assembly. The agreement details the goal of attracting KRW 50 billion worth of investments and creating jobs for 100 employees.
*Reshoring: A policy that involves bringing overseas companies back to their main countries by offering tax incentives, easing regulations, and providing grants
◦ The signing of the reshoring MoU holds great significance as it is the first U-turn investment after the government drafted a proposal to support overseas companies returning to Korea, which was ed at an Emergency Economic Council meeting headed by President Moon Jae-in on June 1.
◦ Selected as a returning company last May, Aju Steel Co., Ltd. shut down its office in Manila, Philippines. For 2 years and 7 months, beginning 2020 until 2023, the company plans to build a factory on a 66,116 m² land at Gimcheon General Industrial Complex 1 for the production of color steel plates for home appliances and eco-friendly interior and exterior designs. It also aims to implement a smart factory throughout the entire manufacturing process to improve product price and quality competitiveness.
◦ According to company representatives, Aju Steel Co., Ltd. chose Gimcheon as its return location because of its accessibility to Aju EGL Co., Ltd., where it sources raw materials, the market, and reduced logistics costs. The decision was made after several meetings with the ision of Investment Promotion of Gyeongsangbuk-do. Moreover, civil officers’ proactive promotional activities played key roles in the company’s return to Korea.
◦ Meanwhile, Gyeongsangbuk-do hosted an entrepreneur conference led by Governor Lee Cheol-woo for reshoring and investment promotion and proposed support plans for overseas companies returning to Korea after a briefing about deglobalization brought by protectionism and COVID-19 and the current state of reshoring companies to the country, along with the collapse in global supply chains of manufacturing industries.
◦ To help reshoring companies settle down in Korea faster, Gyeongsangbuk-do devised several support plans. The provincial government asked the Ministry of Land, Infrastructure and Transport (MOLIT) to designate Gumi High Tech Valley as an industrial complex for lease to assist a returning company in finding the best location. Regarding equipment support, it aims to reduce the percentage of costs covered by the company for the establishment of a smart factory* from 50% to 10% to improve a returning company’s product price and quality competitiveness and lessen its burdens. As such, it plans to use the provincial budget to cover 40% of the entire cost.
*(Currently) Ministry of SMEs and Startups (MSS): The percentages of government spending and capital expenditure are 50-50. → Gyeongsangbuk-do (Once improved): The rates of government spending, provincial spending, and capital expenditure will be 50%, 40%, and 10%, respectively.
Concerning financial support, Gyeongsangbuk-do plans to increase working capital loans from KRW 300 million to KRW 1 billion and offer a 3% interest subsidy instead of 2% to achieve business stabilization for local small and medium-sized enterprises (SMEs) struggling with temporary financial problems. Apart from these, other support plans involve providing job creation grants, implementing housing support programs, and reducing taxes.
◦ “Despite the global and local financial crisis caused by the COVID-19 outbreak, it is expected that Aju Steel Co., Ltd. would bring hope to local communities by creating new jobs,” Gimcheon City Mayor Kim Chung-seop said.
◦ “I truly hope that the MoU could play a key role in encouraging foreign-invested enterprises to return to Korea and Aju Steel Co., Ltd. could become a globally recognized company in the production of color steel plates,” Gyeongsangbuk-do Governor Lee Cheol-woo said. He also added that he would exert all efforts to create a good environment for running a business in Gyeongsangbuk-do by solving problems that restrict investment in Korean companies.