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Local government lifeline

Published: 01 Jul. 2009, 20:25

Samchuly Bicycle Industrial Co., one of the leading local manufacturers of two-wheeled transportation, announced it will build a new plant in the city of Uiwang, south of Seoul. The company plans to invest 30 billion won ($23.67 million) to construct production lines capable of turning out 100,000 new bikes annually. Construction will start next month with completion scheduled for the end of the year.

The construction of the plant is meaningful in two areas.

The new plant will bring the local bike-manufacturing industry back to life. When his company closed its Okcheon factory in 2005 to shift production to China, local bike production sunk to an annual 20,000 units. That’s a mere 0.7 percent of the 2.57 million units making up local demand, suggesting locally made bicycles are now hard to find here.

The government has been campaigning for an increase in bicycle commuting as a part of efforts to foster environmentally friendly economic growth, only to benefit foreign bike manufacturers. But Samchuly’s opening of a local factory to mass produce sports utility bikes has ignited hope for the local industry.

The industrial activity is also likely to speed up the planned establishment of a bicycle industrial complex in the Daedeok industrial zone.

The industrial return of Samchuly bicycles suggests that the government can bring companies that have moved their factory lines in order to save production costs back home by offering proper policy and technological benefits.

Uiwang demonstrated commendable policy procedures in approving the factory’s construction. The city, upon receiving the company’s application for construction late Wednesday last week, gave the go-ahead the following morning. City officials from 11 different departments gathered their department heads for two hours to scrutinize the documents so a speedy decision could be made. Officials were actively involved from the get-go, even helping to search for the best possible industrial site. The local government has gone the extra mile to lure industrial investment that can benefit the local economy.

Without such efforts at the local level, companies will continue to pack up and leave in search of better working conditions and it will be difficult for local governments to lure new investment. Only a busy local government can keep the local economy rolling.