17 Korean companies selected for government's business support program

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17 Korean companies selected for government's business support program

Jang Young-jin, Vice Minister of Trade, Industry and Energy discuss the acceptance of 17 companies on a government program that provide support on business expansion at a hotel in Seoul on Wednesday. [MINISTRY OF TRADE, INDUSTRY AND ENERGY]

Jang Young-jin, Vice Minister of Trade, Industry and Energy discuss the acceptance of 17 companies on a government program that provide support on business expansion at a hotel in Seoul on Wednesday. [MINISTRY OF TRADE, INDUSTRY AND ENERGY]

Seventeen more Korean companies have been included in a government program that will provide financial support and consulting to transitioning businesses.
 
According to the Ministry of Trade, Industry and Energy on Tuesday, one of the companies accepted to the government’s program is EcoPro Materials.
 
The company's main business deals with manufacturing precursors for rechargeable batteries, including importing raw materials such as nickel and cobalt.
 
EcoPro Materials plans to expand its business to recycling used batteries.
 
The company plans to invest 30.1 billion won ($21.1 million) over the next five years, or 9 percent of its total assets, and hire 30 new employees to add to its current workforce of 352.
 
Another company included in the government program, Ercohs Agricultural Corporation, which specializes in baby food, is expanding its business to include vegan meat alternatives.
 
The company plans to invest 3.3 billion won over the next five years, 9 percent of the company’s assets, and hire 62 more employees to add to the current 166 employees.  
 
Among the 17 companies selected for the support program, seven are expanding into the future car businesses, while another seven are transitioning or expanding into the bio and agricultural industry, including developing digital health treatments.
 
Another company accepted to the government program specializes in making paper straws and plans to expand its business to include paper food containers.
 
The companies that have been accepted have promised a combined investment of 160.4 billion won and 504 new positions.
 
The Business Reorganization program, which was first introduced in 2016 under the Corporate Revitalization Act, provides various government support including research and development funding as well as low-interest loans from state-owned financial institutions such as the Korea Development Bank and the Industrial Bank of Korea.
 
Other benefits include relaxed antitrust regulations such as cross investments among affiliates and tax benefits such as tax credits for tax loss carryforwards.
 
So far, 331 companies have been accepted to the program.
 
“The purpose of this program is to further stimulate innovative activities of companies,” an official from the ministry said.
 
The official added that encouraging businesses to venture out and change their businesses to be more innovative could possibly prevent companies from becoming insolvent, thus minimizing the social costs that comes with restructuring.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]
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