Saemangeum attracts big money

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Saemangeum attracts big money

A Chinese producer of solar power equipment will invest 300 billion won ($270 million) in building factories in the Saemangeum Free Economic Zone, which sits on reclaimed land off the west coast of Korea, Seoul officials said on Thursday.

Chinese solar power company CNPV Solar Power SA signed a memorandum of understanding with the Korean government about the construction at the Federation of Korean Industries in Yeouido, western Seoul.

It is the largest investment by a Chinese company in Korea’s manufacturing sector, according to the state-run Korea Agency for Saemangeum Development and Investment.

CNPV will become the sixth company to invest in the zone. Others include OCI, a Korean chemical company that will spend 2.2 trillion won on a combined heat and power plant; OCISE, a subsidiary of OCI that will build a coal power plant; Toray, a Japanese industrial product company that will build a plant to produce a high-end resin; Solvay, a Belgian company that will invest 120 billion won in a plant to produce silica; and ECS, a small-sized Korean company that will spend 2.8 billion won on the construction of a heat exchanger.

The participation of CNPV, a state-controlled company of China, is expected to create at least 300 jobs, the administration said.

“Chinese solar power makers face high barriers to entry in exporting to the United States or Europe because of their high tariffs [against Chinese products],” said Jang Seong-gun, a representative of the CNPV Korea. “But the tariff problems will be resolved if we produce products here in the Saemangeum area because they will be made-in-Korea products.”

Located in Gunsan, North Jeolla, the 409-square-kilometer (158-square-mile) area was reclaimed in 2010. The government aims to develop the zone as a business hub in northeast Asia by 2023.

Approximately 22.1 trillion won in state budget has been allocated for the zone, which includes residential, industrial and commercial areas. About 70 percent of the land will be used for business and residential purposes, while the remaining 30 percent will be for agriculture.

“With the signing of the Korea-China free trade agreement, discussions are ongoing over arranging joint economic areas between the two countries,” said Lee Byoung-gook, head of the Saemangeum development agency, at the meeting. “Development is accelerating in the Saemangeum area, and this is the right time to raise more investments.”

The agency plans to arrange a “joint industrial complex under the Korea-China free trade agreement” in the zone.

“We will attract other Chinese companies to invest on the so-called Korea-China FTA area, a special region where they can enjoy additional tax benefits under the agreement,” said Jo Chang-wan, an official of the agency, by phone. “If the Chinese makers produces goods in this area, they can evade the huge retaliatory tariffs against Chinese products [by the U.S. or Europe] when they export them overseas.”


BY KIM HEE-JIN [kim.heejin@joongang.co.kr ]

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