Conglomerates to be Permitted to Establish and Enlarge Factories in Seoul Metropolitan Area

Large conglomerates inside the country will be able to construct new factories in the Seoul Metropolitan area in 11 years.

Foreign investment companies will be given an extension in time period to build new factories or enlarge previous ones in the metropolitan area. Accordingly, 3M Korea will be able to start the construction of its Hwaseong plant in Gyeonggi Province on May 26, as originally planned.

Chairman Seong Kyeong-ryung of the Presidential Committee on Balanced National Development and Deputy Minister Oh Young-ho of the Ministry of Commerce, Industry and Energy (MOCIE) held a press conference at the Gwacheon Government Complex on Wednesday, May 11, and said, “The enforcement decree for the industrial agglomeration activation and factory establishment act, which states that only domestic conglomerates in 14 high-tech industries can enlarge factories in the Seoul Metropolitan area, will be revised so that new factories may be built.”

The establishment of new factories for large firms in the metropolitan area was blocked after the factory allocation and establishment act, the former industrial agglomeration activation and factory establishment act, was passed in July 1994.

Chairman Seong said, “However, government agencies and Gyeonggi Province have different views on which of the industries should be permitted to establish and enlarge factories. The fourth meeting for development of the metropolitan area will be held on May 20 to conclude the final decision, and overall development countermeasures will be announced on May 31.”

As for the limit on conglomerates which can establish and enlarge factories, Gyeonggi Province is requesting a broader level than that of foreign investment companies (25 high-tech industries), while the MOCIE and the Finance-Economy ministry are set on the same level as foreign investment companies. The Construction and Transportation Ministry and the Presidential Committee on Balanced National Development are insisting on 14 high-tech industries.

Seong said, “There were no disagreements between the government agencies or Gyeonggi Province to the measure to extend the period for establishing or enlarging factories in the metropolitan area for foreign investment companies, and so it will be decided upon in the cabinet meeting on May 17.”

Accordingly, 3M Korea, which had decided to hold off the groundbreaking due to the regulations, will be able to start the construction of its TFT-LCD film factory.

The government is planning to apply the maintenance development zone designation and restriction exception to areas where government buildings and public institutions are transferring.

Byong-Ki Lee Chang-Won Kim eye@donga.com changkim@donga.com