Ask any multinational company and North Gyeongsang Province is no longer a lesser known region of Korea, recognised only by a scattering of people for its scorching summers and sweet apples. Today, the province has made strides to turn itself into a top-notch investment destination, offering a myriad of advantages for both domestic and foreign companies.
Bearing witness to such growth, this year North Gyeongsang Province saw exports and investment by companies based in the region grow by 43 percent and 23 percent, respectively, catapulting it to the top among 16 regional governments.
Punctuating such success, for the last five-year period, foreign direct investment that flowed into the province amounted to 5.6 billion.
This is nearly half of the 11 billion that the central government expects to have realized in foreign direct investment for the entire country.
During the first half of the year, the province attracted about 700 million in foreign investment, including 400 million from Toray, a Japanese chemicals and textiles firm, and 260 million from Asahi Glass, a Japanese automobile glass manufacturer.
A string of Korean companies, such as Daelim Industrial Company and Hyundai Heavy Industries, also invested about 1.3 trillion won (1.13 billion) during the first half, propelled by various tax benefits and administrative support measures introduced by the province.
North Gyeonsang Provinces undying support for its industries, on top of a remarkable gain in know-how on attracting investment has nurtured the recent success, according to officials.
Home to six national industrial complexes, 25 local industrial complexes and 53 regional industrial complexes, the province has continuously built up its industrial capacity.
And at the center of all this is Govenor Lee Eui-gun who set foreign investment as one of the keys goals for the province.
We have established industrial complexes and each plays a unique and crucial role in supporting our economy. Foreign companies investing here can benefit from our geographical advantage, technological efficiency and research capabilities, the governor said.
Recently, the province was recognised for its efforts.
On the fifth Foreign Company Day, the province received the Presidential Award for its distinguished role in attracting foreign investment and making Korea a more business-friendly country.
We will continue our efforts so that (North Gyeongsang Province) can be the most powerful driving force of the Korean economy as well as the global economy, said Lee, with a nod to foreign companies that the province is here for your growth opportunities.
Financial and logistics
North Gyeongsang Province is providing both financial logistics advantages to the foreign companies that are entering the region.
To date, many prestigious foreign firms, ranging from Philips, Hitachi, Owens Corning, Asahi Glass, Coors Tec, DuPont and P&G, have established offices in the province and are creating jobs for the 4 million residents.
In September, Siemens AG, a leading diversified multinational, opened an ultrasound medical systems plant.
Siemens would like to contribute toward Korea becoming the world leader in the science and technology field with its skilled human resources and advanced technologies through active R&D investment and technology transfer, said Josef Winter, chief executive officer of Siemens Ltd. Seoul.
Supporting the foreign firms rush to the province are a bag of attractive incentives.
For example, high-tech businesses can rent the factories for no charge for a 50-year period, while other manufacturing businesses can rent them for as low as 0.9 per square meter per year. Various start-up packages and support systems are being provided to help the newcomers achieve stable management.
Also, the area provides tax breaks for up to seven years, while exempting all taxes for high-tech business and businesses locating in foreign investment zones over a period of 15 years.
In addition, a number of firms are given grants and subsidies for employment, training and land purchase.
Access to a skilled workforce is another merit for companies based in the province. Every year, 30,000 students graduate from 39 universities and junior colleges in the province, thus allowing firms to hire top-notch personnel with relative ease, according to provincial officials.
To further sharpen the provinces industrial competitive edge, North Gyeongsang Province began to nurture several of its major cities into specialized industrial zones.
Pohang, home to a number of heavy industries, namely POSCO, the countrys largest steelmaker, is to be turned into a hub of nanotechnology. Gumi will act as a center for for ination technology and electronics parts. Spanning over 167,347 square meters, about 600 high-tech, IT and manufacturing firms have factories and research centers in the city. Rental fees are fully waived for high-tech companies and 75 percent of rental fees are reduced for a firm that invests more than 1 million in the area.
The northern cities will soon play major roles to prop up biotech and marine industries.
These efforts did not go ignored as more than 30 global firms have signed agreements with local authorities for strategic alliances.
In terms of logistics, with direct access to the rapidly growing markets of Asia-Pacific, North Gyeongsang Province offers special advantages for global businesses looking for strategic investment locations.
Most major cities are within a two-hour travel time by the express train KTX, while industrial cities lie between two and four hours by car. Regional highway bus lines and a regular train system supplement the KTX, in addition to a wide range of air connections, both national and cross-border.
Three airports - Daegu International Airport, Yecheon Airport and Pohang Airport - easily connect the province to cities in Japan, China, Russia, a number of Asia-Pacific countries, Hong Kong and Singapore, while Uljin Domestic Airport is preparing to open.
Seven rail lines connect the province to the rest of the country and will be linked to the Trans-Siberia Railway and Trans-China Railway. Since the bullet train has started smooth operations, Gimcheon, Gumi and Daegu have become busier in their cultural and economic activities, according to North Gyeongsang Province officials.
The annual cargo handling capacity of the area is expected to reach 76 million metric tons this year, with Pohang Port, one of the major shipping hubs of Asia-Pacific, handling 44 million tons of cargo per year with its 44 berths.
The construction of Young-Il Bay Port, to be completed in 2011, should further assist marine transportation.
The Nakdong River, the longest river in Korea, runs through the province, allowing 2,190,000 tons of water storage in six industrial and agricultural dams. Electricity prices in the province are lower than anywhere in the world, according to Korea Electric Power Corp. surveys.
Such news of incentives for operating in North Gyeongsang Province is far from new, as the area has long been playing a pivotal role in the economic achievement of the country over the past 40 years.
It was a major contributor to the miracle on the Han River, when Korea experienced annual economic growth of about 8.2 percent. Now that it has conquered the few years of deterioration that came amid the economic crisis as textiles and other major industries suffered blows, the province promises to make essential contributions in turning Korea into a hub of Northeast Asia.
