Sejong to lose billions of promised investment

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Sejong to lose billions of promised investment

Companies that had planned to invest in Sejong City under President Lee Myung-bak’s revised plan - which offered a science business belt, cheaper land and reduced taxes - made it clear Monday they’re not going to bother now that the plan has been dealt a death blow.

When the government announced the revised plan for Sejong City back on Jan. 11, Samsung, Hanwha, Lotte and Woongjin promised 4.4 trillion won ($3.7 billion) in investments that would create 22,000 new jobs in the city. Even Hyundai Motor, SK and LG showed interest and said they would “positively consider the entry” when a firm offer came from the government.

The largest investor, Samsung, believed its next big growth engine could come from developing new businesses, such as eco-friendly energy development and health care fields, in an area dedicated to science enterprise. Samsung’s plan was to invest 2.5 trillion won for its various subsidiaries to enter the area, including Samsung Electronics, Samsung LED, Samsung SDI, Samsung SDS and Samsung Electro-Mechanics.

“If the revised plan gets rejected, we will look for ways to find a new site or utilize our existing sites,” said a Samsung representative. Samsung is responsible for more than half of the entire 4.3 trillion won in projected private sector investments in Sejong.

Hanwha’s plan includes investing 1.3 trillion won on a defense technology research institute and developing solar energy in a research and development center, along with a solar battery factory, which may all be in jeopardy.

“We signed a memorandum of understanding with the government on the condition that the revised plan will pass in the National Assembly. If the plan gets rejected, our agreement will become invalid,” said a representative from Hanwha.

Lotte planned to build a bio-food research institute. “Our plan to build a research institute was only based on the condition that there will be various benefits the government promised, but if this does not happen, reconsidering our plans will be inevitable,” said a representative.

Woongjin, well known for its water purifiers, had planned the relocation of its three major subsidiaries including, Woongjin Energy, Woongjin Coway and Woongjin Chemical.

A representative from Woongjin said, “If the plan goes back to the original, there will be no merit in entering the area. If the revised plan is rejected, we will start looking for other sites.”

“Before the revised plan, we did not even consider investment in Sejong City. We have absolutely no reason to enter the city if the plan changes,” said a Samsung representative.


By Lee Sang-ryeul, Jung Seung-hyun [seungjung@joongang.co.kr]

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