Ministry of Industry Supports 72 Local Investment Companies with 347.5 Billion Won

"Private Investment of 1.7 Trillion Won, Inducing Creation of 4,074 Local Jobs"

Gwangju Global Motors (GGM) complete vehicle factory construction site. (Photo by GGM)

[Asia Economy Reporter Moon Chae-seok] The Ministry of Trade, Industry and Energy announced on the 13th that it will provide subsidies totaling 347.5 billion KRW (national funds 255.3 billion KRW, local funds 92.2 billion KRW) to 72 local investment companies.

During the investment period (up to 3 years), local investments are estimated to reach 1.7529 trillion KRW, creating 4,074 new jobs.

The structure is such that new hires are made during the investment period, and jobs are maintained for at least five years during the business implementation period after the investment is completed.

Compared to last year, the investment amount increased by 20.2% (294.1 billion KRW), and new jobs increased by 21.5% (720 people).

The Ministry of Trade, Industry and Energy expects this to contribute to expanding investment and job scale, ▲realizing a new job model through the full-scale investment in win-win regional jobs, ▲economic recovery through continuous investment in special industrial crisis response areas, and ▲stabilizing supply by expanding production facilities in the materials, parts, and equipment sectors.

First, Gwangju Global Motors (GGM), selected as Korea’s first win-win regional job model on June 15, is building a factory covering 117,000㎡ in the Bitgreen Industrial Complex in Gwangju City. An investment of 419.7 billion KRW has been made.

By the second half of next year, it will enter mass production of 70,000 units annually of compact SUVs and hire 908 employees. It is expected to introduce a new job model based on fair wages, working hours, and mutual growth.

Investments and subsidy support continue in special industrial crisis response areas (crisis areas) such as Gunsan City in Jeollabuk-do and Jinhae-gu, Changwon City in Gyeongsangnam-do.

Crisis areas receive benefits from local investment promotion subsidies, including an increase in location subsidies from 30% to 50% and equipment subsidies from 14% to 34%.

After designating nine local governments as crisis areas around May 2018, only four subsidy applications were made in the second half of that year. Investments began in earnest from last year, with 12 applications last year and 11 this year.

This year’s investment scale totaled 224.4 billion KRW (subsidies 77.2 billion KRW), creating 752 new jobs.

To establish mass production systems for core strategic technology items such as semiconductor materials and smartphone parts, two companies are expanding production facilities worth 73.1 billion KRW (subsidies 20.1 billion KRW) in Iksan City, Jeollabuk-do, and Cheonan City, Chungcheongnam-do.

An official from the Ministry of Trade, Industry and Energy explained, "This investment case is meaningful as it combines the ministry’s preferential subsidy policy to enhance competitiveness in the materials, parts, and equipment industry in response to Japan’s export restrictions and companies’ determination to target related markets."

Earlier, in November last year, the ministry revised the notification to increase location subsidies from 30% to 50% and equipment subsidies from 14% to 34%, respectively.

The local investment promotion subsidy was established to support companies investing in local areas, including new or expanded facilities and relocation of companies from the metropolitan area to local regions.

The ministry expanded the eligible industries for new or expanded facility subsidies. Previously limited to regionally concentrated industries, key industries, and wide-area cooperation industries within manufacturing, information and communication, and knowledge service industries, it has now been extended to "all industries."

The new employment requirements have been relaxed from "100 or more for large enterprises, 50 or more for mid-sized enterprises" to "70 or more for large enterprises, 30 or more for mid-sized enterprises."

On the 2nd of last month, the support limit for win-win regional job investment subsidies was also increased from a maximum of 10 billion KRW in national funds to 15 billion KRW.

Kim Hyun-chul, Director of Regional Economic Policy at the Ministry of Trade, Industry and Energy, said, "We will continue to improve related systems so that subsidies can enhance the effect of national balanced development and become an efficient policy tool for regional economic development, including regional industry promotion strategies."

This content was produced with the assistance of AI translation services.