Japan high-tech companies rush to northern Seoul suburb

The northern Seoul suburb of Paju, Gyeonggi Province, is growing into a popular investment destination for Japanese companies.

Previously called a "military city" or "lagging city," Paju were restricted from development because of its proximity to the inter-Korean border. More recently, however, more Japanese companies are seeking to enter Paju as a stable investment destination, reinvigorating the city`s economy.

○ High-tech Japanese companies flocking to Paju

Nippon Electric Glass will build an OLED glass plant at a foreign industrial complex in Paju. The plant will be built on 105,700 square meters with investment worth 500 million U.S. dollars.

The Japanese company is the world`s third-largest LCD glass supplier and will build Korea`s largest smelting furnace to supply LCD glass. Detailed plans including those on power supply are under discussion.

Idemitsu Kosan, which holds OLED material source technology, chose Paju as its first overseas destination in January. It will built its Korean production base on a site covering 13,000 square meters inside the Dangdong Industrial Complex.

The construction of a factory for 26 million dollars will be completed in September this year, and production will start in January next year. Idemitsu holds the most OLED material patent technologies in the world, and most display makers in Korea and abroad use its products.

Led by Gyeonggi Province and Paju, the Dangdong foreign-invested industrial complex (641,000 square meters) saw construction begin in 2004 and completion in 2011l. Five Japanese companies or joint ventures have or plan to advance there.

Paju Electric Glass, a maker of LCD boards, is the first Japanese company to have advanced into Paju. The company was formed by Japanese investment of 46 million dollars and entered Paju in November 2005, when the complex was under construction.

A month later, LCD raw materials maker Kotem came, with Korea and Japan jointly investing 13 million dollars. In 2008, Korea Albac Materials, a manufacturer of thin film TFT-LCD machinery, came and poured in 17 million dollars.

○ Adjacent and convenient traffic

Paju attracted more than 1.5 trillion won (1.3 billion dollars) of Japanese capital as of May this year. The reason Japanese companies are eyeing Paju is because of the nuclear accident in the aftermath of last year`s massive earthquake in Japan. In searching for overseas investment destinations, Japanese companies seem to like Paju for its proximity to Japan and its superior traffic infrastructure.

Paju is known as an optimal place for logistics transportation via land, air and sea because it is near Unification Road, Freedom Way, Incheon International Airport and the port of Incheon. LG Electronics` LCD complex in Paju is raising its global domination, leading to a huge demand for high-tech parts and materials, and this has prompted Japanese companies to choose the area.

Amid the Japanese advance into Paju, Korean companies are also rushing into the city`s industrial complexes. Among the 12 facilities that have been built there, 10 are full. The other two, Sunyu complex (90 percent) and Dangdong (80 percent), are near capacity.

Paju Mayor Lee In-je said, "High-tech Japanese companies have keen interest in Paju and this is why we are attracting these companies. We will offer full support for companies moving in ranging from plant construction to production and corporate management."

dalsarang@donga.com