S. Korea, Japan creates `parts investment fund`

SEOUL, April 27 (Yonhap) -- South Korea's state-run development bank and a
Japanese financial firm have created a new investment fund that could fuel
bilateral business tie-ups in the industrial parts sector, the government said
Monday.
The 50-50 vehicle established by the Korea Development Bank and CSK Venture
Capital will be used primarily to invest in South Korean companies, but will also
be able to help Japanese companies operating in the country, the Ministry of
Knowledge Economy said.
The memorandum of understanding (MOU) marks the first time that a Japanese firm
has agreed to create a fund to help parts and components firms and may lead to
similar arrangements in the future.
"The exact size of the investment is not mentioned in the MOU, but it may reach
US$100 million," said Jeang Dae-jin, head of the ministry's foreign investment
division.
He said that the fund will facilitate investment by foreign companies and boost
government efforts to create a dedicated industrial park for Japanese businesses.
CSK is one of the top three venture capital firms in Japan and is estimated to
operate funds totaling $300 million. The company set up a corporate consulting
and investment support company in the country in 2005 with total investment so
far reaching $200 million.
The deal is important because Seoul has been trying to reduce its chronic trade
deficit with its neighbor by asking more Japanese parts companies to build
factories in South Korea that can make products for export to Japan.
South Korea incurred a $32.7 billion trade deficit with Japan in 2008, mainly due
to the country's reliance on key parts, components and manufacturing machinery.
yonngong@yna.co.kr
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