Large-scale defense and precision machinery investment concentrated at Changwon industrial complex
Promising out-of-province firms including Witech relocating to South Gyeongsang
County-level industrial complexes expanding into defense and aerospace
Investment compliance rate hits 98% as 'Great Leap' drive gains momentum
South Gyeongsang Province, together with seven of its cities and counties, has secured 416.1 billion won ($302 million) in investment commitments from 12 companies in advanced industries including aerospace, defense, precision machinery and energy, accelerating its "Great Leap" development drive. The agreements are expected to create 454 new jobs in the province.
The province signed the advanced-industry investment memoranda of understanding Monday at the main conference room of the provincial government building. Governor Park Wan-su attended alongside the heads of seven municipalities — Changwon, Sacheon, Gimhae, Yangsan, Haman, Sancheong and Geochang — and the chief executives of the 12 investing companies.
Of the 12 firms, eight will build new factories while four will scale up existing facilities. The move appears to reflect companies' swift response to a surge in export orders and expanding global contracts in key sectors including K-defense, precision machinery and energy.
The most prominent feature of the agreements is a wave of large-scale investment in defense and precision machinery centered on the Changwon National Industrial Complex. Auto parts maker DMG will invest 100 billion won — the largest single commitment in this round — to build a new factory and hire 100 workers. K-defense parts supplier Geum-a Hydro Power will spend 90 billion won on a new plant and take on 120 employees to meet growing order volumes, while AMS, a combat vehicle maintenance, repair and overhaul company, will invest 60 billion won and add 36 staff.
Also notable is the relocation of promising out-of-province firms to South Gyeongsang and the diversification of production bases into county-level industrial complexes. Witech, a transformer specialist headquartered in Naju, South Jeolla Province, will split 26 billion won across the Geochang General Industrial Complex and the Elevator Specialized Agricultural and Industrial Complex to build a new factory and hire 45 workers. Bimbo QSR Korea, a global food manufacturer based in Asan, South Chungcheong Province, will invest 35.4 billion won at Gimhae Science Park to build a supply chain serving the Yeongnam region.
In county-level areas, BHI, a power plant specialist in Haman, and Hangong Uju Bangsan Danjo will invest 35 billion won and 20 billion won, respectively, to expand their existing factories. In Sancheong, aircraft wing component maker Yulgok will invest 10 billion won to scale up its production line. Sacheon will see Doosan Industrial Vehicle Gyeongnam West invest 10 billion won and eco-friendly paint maker BR Ceratech commit 5 billion won. In Yangsan, transformer insulation producer ITC and industrial rubber manufacturer Jinseong R&T have confirmed investments of 16 billion won and 8.7 billion won, respectively.
Unlike typical local government MOUs, which often draw skepticism over their lack of legal binding force, this round of agreements is considered highly likely to result in actual ground-breakings and capital deployment.
"Because provincial subsidies and tax incentives are officially recognized only for funds disbursed after an investment agreement is signed, companies come to the table having already secured specific sites and drawn up concrete execution plans," an official from the province's investment attraction division said. "A comprehensive compliance review of this year's agreement companies conducted in June found a 98 percent on-track rate, reflecting the rigorous follow-up management in place."
The province also set firm standards for the quality of job creation. All 454 planned hires are counted as full-time permanent employees covered by the four major social insurance programs. The province wrote a "local residents first" hiring clause into the agreements, ensuring that science and engineering graduates from regional universities and young talent from specialized vocational high schools receive priority consideration.
"Corporate investment is the surest engine for reviving a sluggish regional economy and building South Gyeongsang's future," Governor Park said. "We will provide hands-on, one-stop administrative support from the investment decision stage through factory completion and full operation, and we will boldly sweep away the regulations that stand in the way of business activity."
ook967@heraldcorp.com
