Kang Gam-chan, head of the trade and investment bureau at the Ministry of Trade, Industry and Energy [Yonhap]
Kang Gam-chan, head of the trade and investment bureau at the Ministry of Trade, Industry and Energy [Yonhap]

The government is moving to boost regional investment by reshoring companies and foreign-invested firms. It plans to implement as early as October an amendment to the enforcement decree of the Reshoring Support Act — pre-announced for legislation last month — and will overhaul the subsidy system starting next year.

The Ministry of Trade, Industry and Energy said Kang Gam-chan, head of the trade and investment bureau, visited Daegu on Thursday to review investment activity at reshoring firm Daedong and foreign-invested company Valeo Mobility Korea, and discussed measures to promote regional investment.

Daedong, a mid-sized agricultural machinery manufacturer named this year's third reshoring company, recently wound down its overseas operations and decided to invest about 80 billion won ($56.5 million) to scale up its Daegu factory. The company plans to build a dedicated facility incorporating an AI factory to produce AI-based autonomous driving tractors.

At a subsequent roundtable, reshoring companies in the Daegu-Gyeongbuk region — including Daedong, Guyoung Technology, Iljin and Isupetasys — called on the government to provide active support in response to global supply chain restructuring and intensifying protectionism.

In response, the ministry said it plans to comprehensively reform the subsidy system starting next year to strengthen tailored support centered on non-metropolitan areas and advanced industries. The overhaul will introduce a negotiation-based approach for large-scale and strategic investments, apply differentiated support taking into account employment outside the greater Seoul area, youth hiring and advanced strategic technologies, and shift from fixed caps to a subsidy-rate ceiling model.

Valeo Mobility Korea, also visited Thursday, is the autonomous driving components manufacturing arm of French automotive parts giant Valeo. Operating out of a production factory in Daegu and a research and development center in Gyeongsan, the company develops and manufactures advanced driver assistance system components — including ultrasonic sensors, radar and cameras — as well as control systems that form the core technology of autonomous driving.

The ministry said the investment is contributing to strengthening the regional future-vehicle supply chain and creating jobs. Valeo said it plans to develop South Korea into a key ADAS production hub in Asia.

"To respond to the spread of AI and external uncertainties, the regions must become the center of investment," Kang said. "We will provide all-around support so that capable companies can invest and grow in the regions."


oskymoon@heraldcorp.com