2012 No.12
Ulsan Investment News
Ulsan Metropolitan City
CONTENTS
Ⅰ. Economic & Industrial News in Ulsan
`1
1. Increase in Ulsan Exports to the U.S after KOR-US FTA
1
2. Current status of Ulsan businesses
1
st
3. Trade balance in June and exports in the 1 half of this year
1
4. Seminar for by-product hydrogen experts
2
Ⅱ. Investment News in Ulsan
2
1. Completion of a Low-e glass plant of Hausys Interpane
2
2. Ulsan city, active in attracting FDI
3
3. All-out efforts to attract FDI by the Ministry of Knowledge and Economy
3
Ⅲ. Industrial trends
6
1. Strategies for IT Convergence and Diffusion (2013~2017)(MKE)
9
2. Preemptive responsive strategies to shale gas industry
Ⅳ.
12
Q&A
14
Ⅴ. Heart-warming stories
15
Ⅰ. Economic & Industrial News in Ulsan
1. Increase in Ulsan Exports to the U.S after KOR-US FTA
Exports to the US from Ulsan, Korea have increased after KOR-US FTA. They were USD2.69
billion between March and May up 31.2% compared to the same period last year but total exports
decreased by 12.4% during the same period. By product, automobiles have received the biggest
benefits from FTA among products. The exports of autos, petroleum products and steel increased
35.9%, 12.3% and 35.5% respectively.
2. Current status of Ulsan businesses
According to the statistics office, Ulsan has 71,000 businesses and 434,000 employees. Ulsan city
analyzed the results of the Economy sensus by the Statistics Office of Korea. Ulsan’s employers
and employees account for 2.1% and 2.5% of the nation respectively.
Among the employers in Ulsan, whole and retail sailers take up the most which is 18,000(24.9%)
followed by 16,000(22.4%) of hotels and restaurants and other service business.
148,000 employees are working in the manufacturing sector taking up 34.1% and 47,000 people are
engaged in the whole and retail sale sectors accounting for 10.9%. 40,000 people are employed in
hotels and restaurants which is about 9.2%.
The annual sales of businesses in Ulsan are 221.621 trillion won accounting for 5.1% of the nation
total. The annual sales of manufacturing sector, whole & retail sales and finance & insurance are
178.3 trillion won (80.5%), 13.220 trillion won (5.9%) and 8.88 trillion won (4%) respectively.
3. Ulsan trade balance in June and exports in the 1st half of this year
Trade balance in June, 1.14 billion dollars of surplus
Ulsan Customs Office said that Ulsan recored the trade surplus of USD 1.14 billion with USD 8.9
billion of exports and USD 7.36 billion of import. The exports of autos and oil products increased 3%
and 17% respectively compared to the same month last year but ships and chemical products
decreased 47% and 6% respectively. The imports of crude oil and chemical products went down 2%
and 6% respectively while the import of machinery has risen 53%. The trade surplus of the period
between January and June was USD 1.99 billion.
The export in the 1st half of this year, down 1.2% compared to the same period of last year
According to the Korea International Trade Association, Ulsan’s export in the 1st half of this year
decreased 1.2% to 49.52 billion dollars compared to the same period last year. KITA said that is
because of financial crisis in Europe and slow growth of Chinese economy. By item, the export of
1
ships is 4.57 billion dollars decreasing 48.2% due to the decline in new orders. The quantity of
export in petrochemical products increased by a small margin but due to the drop in export price its
amount went down by 4.7% recording 7.13 billion dollars. The export of oil products was 16.43
billion dollars increasing only 12.3% as the two biggest buyers including Indonesia and China, didn’t
buy as much as last year. However, automobiles and parts of exports rised by 22.3% and 17.6%
respectively thanks to the improvement in quality and brand recognition in global market.
An official from KITA expects that decreasing trend of export will be continued in the last part of
this year as the global economic recovery has been delayed.
4. Seminar for byproduct hydrogen experts
Ulsan city co-hosted a Seminar for byproduct hydrogen experts with Ulsan Technopark at Ulsan
Lotte hotel on September 11, 2 pm. Mr. Jang Man-seok, deputy mayor of Ulsan city and 50 experts
participated in the 7th Workshop for byproduct hydrogen experts. Mr. Woo Hang-su, president of
Ulsan Technopark made a presentation on technology development plan to utilize CO2 and
byproduct hydrogen and a joint project within regional economic bloc.
Mr. Shim Min-ryung, assistant director of Ulsan city introduced the project to create the largest
hydrogen town in the world that is equipped with hydrogen fuel cell of 195Kw by utilizing hydrogen
byproduct from industrial complexes. Dr. Lee Seong-hoon, an expert in hydrogen from Korea Gas
Safety Corporation explained the current status of Korean standard for hydrogen fuel cell vehicles
and vision on the establishment of hydrogen supply infrastructure.
In addition, Mr. Jeon Ki-won, president of Korea Research Institute of Chemical Technology
presented on the Trend of reforming natural gas and synthesis gas transferring technology. A
project to utilize byproduct hydrogen is being proceeded smoothly in Ulsan, a center of Korea’s
petrochemical industry and Ulsan will play a key role to secure the original technology in future
energy sector and to open the era of hydrogen economy.
Ⅱ. Investment New in Ulsan
1. Completion of a Low-e glass plant of Hausys Interpane
Hausys Interpane, a foreign-invested company in Ulsan completed its low emissivity glass plant.
It had the completion ceremony on September 20 at its site participated by 300 people including
Ulsan city mayor, CEO and their staff and local residents.
The company is a joint venture between LG Hausys of Korea and Interpane of Germany investing
100 billion won. The area is about 15,120㎡ and is expected to produce 10million ㎡ of low
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emissivity glass or Low E-glass. Low E-glass is energy-efficient, designed to block ultraviolet and
infrared rays from outside.
Considering Europe’s supply rate of Low E-glass is about 80%, the domestic market with 10% of
supply rate will also grow rapidly as the government strengthens energy regulation such as proenvironmental building standard and grade system for window energy consumption efficiency and
changes in consumers’ recognition.
The company expects 150billion won of sales in 2013 and 280 billion won of sales in 2015.
Last year, the Ministry of planning and finance recognized its technology as a advanced one for
the first time in domestic companies. It will lead the industry as it is equipped with technology and
productivity as well.
2. Ulsan city, active in attracting FDI
Ulsan achieved USD655 million of FDI attraction last year despite the global economic crisis. It
has actively attracted 284 million this year contributing to the local economic growth.
Most existing investors and potential ones are from the U.S and Europe thanks to the strong
industrial structure and excellent investment conditions like Ulsan Free Trade Zone. Potential
investors are waiting to invest soon.
At the Regional Development Week that was held in Changwon on September 24, about 10 foreign
investors from the U.S, Japan and Australia wanted to talk about Ulsan’s investment environment.
Especially they showed strong interest in Ulsan Free Trade Zone that is expected to be completed
at the end of this year.
In addition, for the strategic investment attraction, it dispatched its delegation to Europe and India
to meet 16 companies promoting Ulsan investment environment. In the second part of this year, the
city will hold an Investment seminar inviting 120 CEOs of American companies in October and
dispatch its delegation to Taiwan and the U.S making all-out efforts to attract FDI.
The city is also doing its best to help existing foreign investors when they have difficulties in
business in Ulsan.
3. All-out efforts to attract FDI by the Ministry of Knowledge and Economy
► Pursuing customized strategies by region especially China, Japan and the U.S
□ Korea has shown a positive trend in attration of FDI recording the highest amount in its history
recently thanks to the FTAs even though the world is in economic difficulties.
ㅇ The amount of FDI reached 8.35 billion dollars between January and July which is the highest
amount in the same period of its history. The investment amount that was actually arrived in Korea
was 5.26 billion dollars up 44% compared to the same period of last year.
ㅇ Those special strategies were made to expedite the increase in FDI, to create more jobs and
vitalize domestic economy.
3
□ The government will come up with investment attraction strategy customized to major investors
and strengthen the one-stop service for foreign investors.
□ The investor-customized attraction strategies are followings.
(1) China
ㅇ 최근 중국 관광객 증가추세를 활용하여 관광․레져분야 투자유치를 확대
As the number of Chinese tourists are increasing, investment attraction from tourism and leisure
sectors will be focused by providing various incentives. For exemple,
① Attracting investment in tourism and leisure facilities in resort complex by the end of this year
that have been delayed due to a strict regulation like Pre Qualification system
② Considering the expansion of investment immigration system to regions other than Jejudo where
Chinese investors have interests
③ Considering a new incentive for foreign investor in the service sector like tourism such as tariff
exemption for capital goods
* Currently only tariffs on capital goods of 1st and 2nd industries in Foreign Investment Zone can be
exempted.
ㅇ In addition, by attracting Chinese companies that have distribution network in China, Korea’s
small and medium sized companies can enter Chinese market by offering foreign investment
promotion fund which is an investment support of Made with China type.
ㅇ When Chinese manufacturers want to invest in Korea to utilize FTA network, technology and
brand, Korean government is considering expanding permitted number of Chinese experts
reemployed in Korea.
- Introducing the system and benefits of Individual type of Foreign Investment Zone and Part &
Material Industry complex
(2) Japan
ㅇ To repond to increasing demand by Japanese parts and material businesses who want to invest
in Korea due to benefits of FTA and strong Yen, Korea will take measures of followings :
① Designating one more parts & material industrial complex adding to existing 4 complexes this
year and the number will be doubled by 2015
② When foreign companies that have cooperative relations with Korean companies invest in Korea,
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small-scale of industrial site(less than 50,000~100,000 m2) nearby the Korean companies can be
constructed.
ㅇ The government will provide supports customized for export-oriented companies, companies
with high technology that has JV with Korean companies or companies investing in Korea with other
Japanese companies.
① To attract export-oriented foreign companies, standard plants for rent in Foreign Trade Zone
will be expanded especially in Ulsan and Donghae and more FTZ will be built near the airports or
ports.
② To encourage JV between foreign companies with high technology and Korean companies,
regulation on JV between companies will be eased providing benefits like designation of FIZ and
cash grants.
③ When Japanese companies invest in Korea with cooperative companies, they are allowed to
develop an industrial complex by themselves and offered with various supports such as Foreign
Investment Zone designation and public infrastructure establishment etc.
④ Songdo in Incheon will have a world-class biotechnology specialized complex as Japanies
companies in biotechnology sector show strong interest.
(3) The U.S. and EU
ㅇ By encouraging cooperation for investment between Korea and the U.S. and EU, more global
production and R&D centers from the regions will be attracted.
① A seminar on investment expansion and a forum on investment cooperation between KOR-US
with AMCHAM were held on September, 2012 and Novemebr 2012 respectively to create
investment boom in Korea after KOR-US FTA.
② Incentives comparable to other countries will be offered to attract global production and R&D
bases from the U.S and Europe.
③ Korean small & medium sized companies who want to advance to overseas market will be
supported by the government linking domestic companies with global companies.
□ In addition, One-stop service will be strengthened and the support system for foreign investment
will be innovated in terms of foreign investors.
ㅇ One stop service will be provided for all the process of foreign investment and e-IK system will
be established to enable foreign investors to invest in Korea online.
5
< Expanded the One stop service of KOTRA IK >
Current
Administration
work
Other
office
work
⇒
Approval and permission for plant
establishment
Visa,
⇒
⇒
business
immigration
service
⇒
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All
the
administrative
process
including incentives
Adding services like registration
registration,
including
After expanding
⇒
other related office work
for
establishing
corporation,
report of technology introduction
and life-related
□ The Ministry of Knowledge and Economy will make all-out efforts by raising its FDI target from
USD13 billion to USD15 billion after establishing special measures so that increased foreign
investment can contribute to overcoming economic difficulties like slow export growth.
Ⅲ. Industrial trends
1. Strategies for IT Convergence and Diffusion (2013~2017)(Ministry of Knowledge &
Economy)
□ The MKE released “Strategies for IT Convergence and Diffusion 2013~2017 on September 7.
□ The strategies will be applied to 5 major industries* that have great economic impacts from IT
convergence and 5 services** that solve social problems and improve individual life.
* Automobile, shipbuilding, marine plants, fiber, defense, airospace, energy
** Food, education, healthcare, disasterㆍsafety, transportation
ㅇ The strategies are to expedite IT convergence to major industries and diffuse related services
to citizens’ life.
ㅇ It will improve system and policies to develop core IT Convergence technologies and its
successful models and create the market.
ㅇ R&D on IT Convergence will be restructured and related infrastructure will be secured such as
standardization and fostering human resources.
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□ If IT Convergence is successfully diffused, existing industries’ global competitiveness will be
strenghthened and new service market will be vitalized. In addition, 46 trillion won of production
and 230,000 jobs will be created by 2017.
ㅇ If IT technology is converged to security and disaster prevention, the quality of citizens’ life will
be improved. For example, crimes can be prevented effectively, food safety will be guaranteed and
long-distance medical service will be widly provided.
□ The MKE is planning to organize and operate an IT Convergence Policy Association.
ㅇ There will be cooperation and consultation between ministries to check details of IT
Convergence policies through the IT Convergence Policy Association.
ㅇ Each ministry will pursue detailed measures by sector and especially the MKE will provide
supports for technology development and cooperative network such as IT Convergence Innovation
Centers by sector to improve policy effectiveness.
｢Strategies for IT Convergence and Diffusion 2013~’17｣
【Achievement and evaluation of IT Convergence for the last 4 years】
□ IT Convergence has been expanded to other industries for the last 4 years. The number of IT
Convergence related organizations, related sales and R&D investment has increased in private
sector.
* (LG CNS) U-Engineering business headquarters (’08), (Mando) Mando Hella Electronics(’08),
(Hyundai Heavy Industries) Expanding business structure of IT Convergence with shipbuilding(’09),
(Hyundai motors) Hyundai autron (’12)
ㅇ Despite the early stage of IT Convergence, tangible achievements have been shown in major
industries.
Exporting 110 ships equipped
with Ship Area Network
16 Korean-made SW
embedded T-50 jet trainers
Exporting transportation card
system to Columbia
exported to Indonesia
□ However, the results of R&D have not commercialized and infrastructure for network between
other businesses and IT companies has not been expanded continuously which should be improved
soon.
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【Directions】
□ Through the diffusion of IT Convergence, new growth engines of industry will be secured and
the quality of citizen’s life will be greatly improved.
ㅇ To do this, related ministries will create new market for 10 industries (5 major industries and 5
service industries).
< Strategies >
Strengthening
global
competitiveness
of
major Linking to improvement of quality of live
industries
Creating IT Convergence service market
▪ creating high-added value of 5 major industries and ▪ Providing support for 5 service sectors
global
competitiveness
through
choice
and considerting their impacts and relations on
concentration
Automobile
s IT
citizens’ life
Shipbuilding
, marine
plants IT
Securing
infrastructure for IT
Convergence
growth
Textile
IT
National
defense
IT
Energy
IT
▪Easing the regulation on creating market
▪Securing international standard initiative for related products and
technology
【Major policy tasks】
A. Improving global compatitiveness of major industries through IT Convergence
□ Pursuing growth strategies customized to each industry with choice and concentration for 5
major industries that have big impacts on industrial development and IT Convergence
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< Goals for IT Convergence of 5 major industries >
ㅇ (Automobile IT) becoming one of top 3 in global auto industry by expanding auto IT
Convergence market
ㅇ (ShipbuildingㆍMarine plants IT) remaining its position as world’s top by developing
technology for high valued addition
ㅇ (Textile IT) Creating new market for textile and fashion by developing smart clothing like 3D
tailored I-fashion
ㅇ (National defenseㆍaerospace IT) Localization of SW to be prepard for network centric
warfare by developing advanced IT technology
ㅇ (Energy IT) Responding to lowering business competitiveness caused by the high energy
cost
Automobiles
Shipbuildingㆍ
marine plant
Textile
National defense
ㆍaerospace
Energy
B. Creating IT Convergence service for citizens’ life
□ Providing support for 5 service sectors including food, education, healthcare, disasterㆍsecurity,
and transportation that improve convenience and safety through IT as they are closely related to
citizens’ life
ㅇ (Food IT) The production, distribution and consumption of Agricultural food will be converged
with IT to establish the environment where people can enjoy safe food and to strengthen
competitiveness of agricultural food industry.
- ①Expanding R&D in IT Convergenc of agricultural food sector ②Diffusion of successful models
linking to agricultural food policies ③Establishing standardization and common infrastructure
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< Service exemples >
RFID livestock control system
Alarming system for security
Providing
information
information
materials and ingredient
on
ㅇ (Education IT) Education and training system of small and medium sized companies will improve
the quality by introducing customized education applied with IT techonologies such as Cloud and Etraining.
Training simulator in a nuclear
plant
Virtual education for driving
Auto repair training
ㅇ (Healthcare IT) Providing consumer-tailored medical and healthcare service and securing a
bridgehead to create a new market
10
< Service exemples >
Long-distance medical service
Wellness-home healthcare service
ㅇ (DisasterㆍSecurity IT) Nation-wide disaster will be more effectively prevented and security
will be more strengthened by developing intelligent image recognition techonologies like CCTV.
< Service exemples >
Automatically recognizable
Security management system
CCTV
for big buildings
Weather
radar
to
improve
weather forcasting
ㅇ (Transportation IT) Reducing traffic accident rate and providing safe and convenient traffic
service through Smart Roads such as communication between vehicles.
- ①Establishing next generation Intelligent Transportation System ②Providing traffic information
for the disabled and predicting traffic for energy efficiency ③Offering incentives for vehicles
equipped with ITS
ㅇ Restructuring IT Convergence R&D system for commercialization and securing global initiatives*
by leading in making international standard of IT Convergence technology
* Predominating SW international standard in automobile and shipbuilding sectors and developing IT
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Convergence Cross-Platform standard to link automobiles and Smart phones
ㅇ Improving system to encourage Convergence new service market and creating a system to solve
difficulties and problems caused by strict regulations
ㅇ Nurturing creative human resource in IT Convergence sector, providing tax and financial
benefits and creating environment to grow IT Convergence such as studying IT Convergence
industrial classification
【Expected effects】
□ Major industries will be more sophisticated through IT Convergence and its service will be more
expanded and 42 trillion won of production and 230,000 jobs will be newly created by 2017.
ㅇ Strengthening the competitiveness of major industries such as automobile and shipbuilding
through IT Convergence
ㅇ The quality of life will be significantly improved thanks to Smart Education, customized medical
service, Smart Autos and safe food.
2. Preemptive response to Shale gas boom(MKE)
□ The Ministry of Knowledge and Economy suggested preemptive strategies to respond to
changes in global energy environment in September, 2012.
□ Shale gas strategies include recent trends of shale gas development and its ripple effects to
energy and other related industries and responsive strategies to them.
ㅇ For the major strategies are followings:
- Natural gas supply lines will be diversified by expanding Shale gas supply in energy sector.
-The Shale gas boom will be a good opportunity to strengthen the capability of resources
development of Korea’s public and private sectors.
-Industry sector will analyze the effects of Shale gas on Korea’s major industries and suggest
countermeasures of domestic businesses to changes in global environment
□ Korea Gas Corporation, Korea Oil Corporation, Overseas Resource Development Association and
Plant Industries Association signed an MOU to cooperate in developing and supplying Shale gas and
to strengthen cooperation between public and private organizations.
□ Details of strategies in Energy and Industry sectors are followings:
【Strategies to develop and supply Shale gas】
① 20% of LNG supply in Korea will come from Shale gas by 2020. Most natural gas is from the
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Middle East and South East Asia but the countries supplying natural gas will be diversified to
stabilize domestic gas price
② Shale Gas Association with private and public sectors will be operated to strengthen their
cooperation to establish a Korean model of Shale gas development which links development,
operation, transportation and supply.
- In addition, Korean government will come up with channels and programs to establish cooperative
relations between domestic companies and energy companies in North America. For example, the
1st Korea-Canada Natural Gas Forum will be held at the end of this year.
③ To expand investment in Shale gas, Korea Oil and Gas Corporations will secure funds amd the
Export & Import Bank will expand its credit limit to the private sector. Trade Insurance Corporation
will expand the guarantee for investment risk to support funds and an overseas resource
development loaning project will be restructured.
④ Shale gas surplus is allowed to trade for the flexible use of secured Shale gas. Domestic LNG
storage facilities will be expanded by public and private companies.
⑤ A Master Plan for Shale gas development technology will be established by this year to secure
the development technology to the level of 80% of advanced countries by 2020 and the feasibility
of R&D projects will be reviewed next year.
- Nurturing experts by sending people to the shale gas development site
【Responsive strategies by major industry】
①
(Petrochemical) Differentiating and expanding products to non-ethylene to be prepared for
expanding facilities of ethane crackers in the U.S. and diversifying material from Naphtha to
LPG
②
(Steel) Expanding exports of steel for shale gas and continuous developmemtn of advanced
steel and new steel manufacturing method using natural gas
③
(Automobile) Improving the performance of core parts to be prepared for CNG Vehicle
increasing and continous monitoring market change of electric vehicle
④
(Shipbuilding) Technology development of LNG propulsion system of large container ships
and localization of equipment of LNG carriers
⑤ (Plant’s Equipment) Expanding technology development of LNG
liquefied plant’s
equipment and receiving orders of plants related to resource development companies
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Ⅳ. Q&A
⊙ Q : What are the environment related laws to follow when establishing a new factory?
☞ A: If the size of a plant site is more than 150,000 ㎡, the business should do the Environment Impact
Assessment. Even though the size is less than 150,000 ㎡, if the business wants to change its usage, it
should also do the assessment.
The business should report and receive permission about kinds and amount of pollutants it releases,
regions and locations to the city orprovince government before building the plant. In case of air pollutants,
the business should receive permission and report on air pollutants emission facility according to the
related environmental law and it is the same case with waste water and noise or vibration under the Acts
on water quality preservation and noise and vibration control respectively.
If the business produces dust scattering directly to the air with no emission facility, it should report to the
city or province government under the Act on air environment preservation and take the necessary
measures to control dust.
In addition, if a business wants to establish an emission facility, it also needs to build a control facility that
reduces emission under the permitted amount. And it should report the operation of its emission and
control facilities to the related office but it doesn’t have to when an emission facility produces pollutants
under the permitted level or there is another way to control the amount of pollutants other than
establishing a prevention facility.
⊙ Q : What kinds of business should do the Environment Impact Assessment and what is the
procedure?
☞ A:
The Environment Impact Assessment is a process to seek the optimal business plan by reviewing and
comparing not only economic feasibility and technology but also environmental factors in establishing and
implementing projects.
It is a preventive system against environmental pollution for the environmentally sound and sustainable
development and clean and fresh environment. Businesses that are subject to the assessment are
followings:
- Businesses that can damage natural environment and ecology such as a golf course
- Businesses in environmentally sensitive area such as natural park district
- Businesses that can not be predicted due to long-term and complicated environmental issues such as
reclamation and Dam construction
- Businesses that could create multiple environmental problems like air and water pollutions such as land
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or industrial park construction
According to the Act on Environmental Impact Assessment, the businesses that need the assessment are
divided into 17 sectors and 74 detailed projects.
The process of Environment Impact Assessment is done by an agency when businesses make reports on
the Environment Impact Assessment. And then it requests a consultation to the related institute like the
Ministry of Environment or Regional Environment management office after collecting opinion of local
residents and related administrative offices.
After the assessment, the business can start. The post management will be done by a regional
environment management office.
Ⅴ. Heart-warming stories
1.
S-OIL, donating fund for school development to Ulsan Education
Office
S-oil donated 30 million won of school development fund to Ulsan Education Office on September
12. The Office will spend for afterschool programs, purchasing books and nurturing athletes of
the company’s sister schools like Shinjeong and Sampyung Elementary schools.
The company donated the school fund to schools nearby the company like Dukshin, Onsan and
Okdong elementary schools, Onsan and Namchang junior high schools for the same purposes.
S-oil has donated about 400million won for schools nearby the company since 2008 according
the Ulsan Education Office. The Oil company has also operated “S-oil kids’ science and magic
school” since last year.
2.
SK Energy giving scholarships to students in the Ulsan University
Ulsan complex of SK Energy invited 4 excellent students of Ulsan University to grant scholarships.
They received school registration fees of 2nd semaster in 2012 of 15.04 million won. SK Energy
has offered 240 million won to students in Ulsan University since 1993.
-------------------------------------------------------♣ This Newsletter is sent by the Investment & Enterprise Service division of Ulsan
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Metropolitan City to provide Ulsan investment information to foreign investors who
might have interest in Ulsan city. If you have any questions related to Ulsan, please
contact [email protected] or 052-229-3073.
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