Government OKs New Factories in Seoul Metropolitan Area

The government has decided to allow LG Electronics, Pantech, Hanmi Pharm and Ildong Pharmaceutical to expand their facilities in the suburbs of Seoul.

This is the third time the Roh Moo-hyun administration has permitted companies to build more facilities outside Seoul. Samsung Electronics and Ssangyong Motor constructed plants in the suburbs in 2004 and eight other companies did so in 2005.

The corporations welcomed the government’s decision and asked it to permit more facilities, including a new Hynix Semiconductor plant in Icheon.

The Ministry of Commerce, Industry and Energy (MOCIE) said that it would allow plant extensions for four companies such as LG Electronics in the suburbs after discussing the matter in the consultation meeting between the government and the ruling party on December 7.

LG Electronics plants in Osan are expected to construct more facilities to extend production of high value-added computing printed circuit boards. Pantech plants in Gimpo will expand development and production capacities of new model cell phones, and Hanmi Pharm factories in Hwaseong and Ildong Pharmaceutical plants in Anseong will concentrate on separating production processing of antibiotics and anti-cancer medicines and generic drugs.

MOCIE expects the permission to increase annual sales by 1.85 trillion won and exports by 780 million won by 2012.

Kim Jeong-kwan, Director General for Balanced National Development of MOCIE, said, “There is no change in the government’s policy on development regulation of the suburban areas of Seoul. The recent permission is to improve the business environment by selectively allowing plants outside Seoul to be extended.”

He added that the industries of the permitted plants rarely increase the population in the areas, will unlikely pollute the environment and match the government’s other policies.

Yang Se-young of the Federation of Korean Industries welcomed the government’s decision and asked it to further approve deregulation on plant extension in the suburban areas where large scale investments are expected.

An insider of Hynix Semiconductor whose suburban plants did not get permission for an extension said, “The government’s regulation should not undermine corporations’ interest or Korea’s competitiveness in the world. When semiconductor companies lose an opportunity to increase their facilities, they should see significant losses.”

MOCIE is planning to look for other areas where Hynix can build facilities and attract investment and, make a decision on it within this year at the earliest.

Meanwhile, Kwon O-kyu, Deputy Prime Minister and Minister of Finance and Economy, said that he was concerned about how long it would take to revamp the environment policy regulation to allow a facilities extension of the Hynix plants in Icheon.

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