Conglomerates to invest 4.38 tln won in new `science-business` hub

By Kim Young-gyo
(ATTN: ADDs more info in paras 6, 8, 12-13, 15, 22)
SEOUL, Jan. 11 (Yonhap) -- Four South Korean conglomerates are set to invest 4.38
trillion won (US$3.87 billion) in building manufacturing and research facilities
in a newly planned city in central South Korea, industry officials said Monday.
The facilities will be built as part of the new "science and business" hub to be
established in Sejong City, about 150 kilometers south of Seoul, according to the
corporate officials.
Speaking on plans formally announced Monday, the officials said the development
in South Korea's central Chungcheon region will aid the government's plan to
build an international "science belt" aimed at securing new growth engines for
the economy.
Samsung Group, which has Asia's biggest electronics manufacturer, Samsung
Electronics Co., under its wing, said it will make the largest investment of 2.05
trillion won to develop new businesses there.
Some 1.65 million square meters of land will be allocated for the conglomerate,
South Korea's largest, according to Samsung officials.
Five Samsung affiliates -- Samsung Electronics, Samsung SDI Co., Samsung LED Co.,
Samsung SDS Co. and Samsung Electro-Mechanics Co. -- will set up operations in
the planned city from 2011 through 2015.
Plans are also being discussed to establish production lines or
research-and-development (R&D) facilities for light-emitting diodes (LED), solar
batteries, fuel cells and bio-health chips, the officials said.
Sejong City will most likely become home to Samsung's production of
environment-related products, with a total of 1.12 trillion won to be spent on
the development of next-generation batteries and cells, as well as in producing
LED lights that consume less energy, are longer lasting and smaller in size than
traditional light sources.
Samsung has also hammered out an agreement with the government to build centers
for data processing and handling telephone calls. Total investments by the
conglomerate are estimated to lead to the creation of 15,800 jobs up in the city,
the official said.
Hanwha Group, South Korea's tenth-largest conglomerate and second to Samsung in
terms of the size of investments in the new city, will spend 1.33 trillion won
and will receive some 600,000 square meters of land.
The group's business interests include chemicals, explosives, insurance and
construction.
Four affiliates of Hanwha, meanwhile, said they will build R&D and manufacturing
facilities in Sejong for new solar energy and defense businesses over the next 10
years, hiring 3,044 new employees.
Hanwha Corp., the group's flagship company, said it will invest 70 billion won in
establishing a research center for future defense and aerospace-related
technology, while Hanwha Chemical Corp. will spend 1.06 trillion won in
establishing an R&D center and production lines for solar batteries and solar
modules.
Woongjin Group, whose business portfolio ranges from publishing to chemicals,
plans to invest 900 billion won in an area of 660,000 square meters.
Woongjin secured the second largest space in the city after Samsung and plans to
build three new factories to expand production of its three affiliates --
Woongjin Coway Co., Woongjin Energy Co. and Woongjin Chemical Co -- over the next
three to four years.
Woongjin Coway, the group's flagship that produces water and air purifiers, plans
to set up a joint laboratory with two other affiliates, according to corporate
officials. The group plans to hire some 2,650 new employees.
Lotte Group, a South Korean retail and beverage conglomerate, will also join in
the development of Sejong. An investment of 100 billion won will be made by South
Korea's fifth-largest industrial group, creating 1,000 new jobs, according to the
officials.
The conglomerate said it would build a food research lab on a plot of 66,000
square-meters.
Sejong's science and business hub is scheduled to become operational within two
to three years if parliament approves the government's revised plan and if
construction work begins within the year.
Most investments by the business groups are expected to be made by 2015,
corporate officials said. The conglomerates will sign tentative agreements on the
spending plans with the government, they added, though they did not disclose when
the deals would be made.
Government officials said early Monday that a limited amount of space remained
for domestic private investors, making it difficult for other South Korean
business groups to make large-scale investments in the new city, though an area
of 1.9 million square meters was allocated for foreign investment.
SSF of Austria, a manufacturer of solar power cell modules, plans to spend 138
billion won on a Sejong City venture, making it the sole foreign investor so far.
The government, meanwhile, said that it plans to make Sejong City the center of a
so-called international science business belt that could attract up to 17
trillion won worth of new investments in the next 20 years.
The belt is aimed at serving as the country's center for basic sciences,
high-tech industries, universities and laboratories.
Once built, the new city is expected to increase national production by 235
trillion won and help create over 2 million jobs, the government said.
ygkim@yna.co.kr
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