Nation’s 17 conglomerates ante up

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Nation’s 17 conglomerates ante up

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Minister of Trade, Industry and Energy Yoon Sang-jick, center in front line, met with top executives from 17 major conglomerates and business lobby groups on Wednesday morning at the Plaza Hotel, central Seoul. [NEWSIS]

Korea’s 17 conglomerates have agreed to invest 34.4 trillion won ($31.3 billion) this year, while the government promised it will support them by easing regulations on chaebol entering new business areas, and on mergers and acquisitions.

Top executives of the conglomerates gathered Wednesday morning at the Plaza Hotel, central Seoul, to announce their plans. Minister of Trade, Industry and Energy Yoon Sang-jick and Vice Minister of Strategy and Finance Joo Hyung-hwan, attended the roundtable meeting.

“We are all aware that this is still a difficult time, but please keep investing to prepare for our future,” said Yoon. “I hope this year’s focus to be on corporate restructuring, which will expand the size and expertise of your stronghold business, while allowing you to enter new businesses.”

Of the 34.4 trillion won, projects worth 22.4 trillion won were confirmed at the last investment meeting in October.

Samsung Electronics is scheduled to start building a new semiconductor production line by June in Pyeongtaek, Gyeonggi. The estimated cost of the line is 15.6 trillion won.

Samsung Display and LG Display are scheduled to expand their OLED display lines instead of moving production overseas. Each project is worth at least 4 trillion won.

The remaining 12 trillion won will go to the government-led projects introduced on Wednesday. Scheduled to get underway as early as the first half of the year, the projects largely involve the expansion of oil refineries and renovation of factories to make them more environmentally friendly.

S-Oil plans to invest 8 trillion won to expand its Ulsan refinery to increase storage space for Korea National Oil Corporation.

GS Caltex will spend 2.7 trillion won to build more manufacturing facilities at the state-owned green field in Yeosu Industrial Complex, South Jeolla. The government last year eased the green field regulation to allow private companies to build there.

Posco will start building facilities at its Gwangyang plant, South Jeolla, to boost galvanized steel sheet production, and a new gas exchange network between Gwangyang and Yeosu.

Hyundai Motor will expand its engine production, and Hyundai Mobis plans additional facilities at its factory in Chungju, North Chungcheong.

Applauding the investment plans, the Industry Ministry promised to push deregulatory policies to ease corporate restructuring.

“Recent business mergers and acquisitions - between Posco Specialty Steel and SeAH Besteel, as well as the defense and chemical affiliate deal between Samsung and Hanwha - were exemplary cases of strengthening specialty areas, while transferring non-specialty areas to other partners,” said Yoon. “This helps Korean conglomerates better survive tough economic times and enhance their business foundation.”

The ministry will push to pass the so-called one-shot business reinvigoration law in the National Assembly by end of the year, which would significantly reduce screening processes by the fair trade watchdog and provide an acquisition tax waiver.

The ministry also will cooperate with Korea Development Bank to extend loan interest benefits to newly-restructured companies that need capital for investment.

BY KIM JI-YOON [jiyoon.kim@joongang.co.kr]

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