During the Management Slump in the Cement Industry, Warm Cooperation with Local Communities

Annual 25 Billion Won Fund Directly Supporting Local Residents, Regional Fund Management Committees to Launch in November
Local Residents "Welcome Faithful Role of Hometown Companies and Efforts for Mutual Development with the Region"
"Paid Over 50 Billion Won in Local Resource Facility Tax on Limestone, Unaware of Usage and Purpose"

Ssangyong C&E Donghae Plant Production Innovation Equipment. [Photo by Ssangyong C&E]

[Asia Economy Reporter Kim Jong-hwa] Recently, the cement industry, which has been struggling due to the urea solution shortage and the surge in international thermal coal prices, has overcome the management crisis and completed the establishment of a fund for continuous mutual growth with local communities.

The established fund is a follow-up measure to the "Voluntary Fund Establishment Agreement by the Cement Industry to Expand Local Community Contributions," signed last February with the participation of CEOs from seven domestic cement companies and four local members of the National Assembly from cement plant regions. The cement industry aims to create a social contribution fund worth approximately 25 billion KRW annually and provide direct support to local residents so that residents near cement plants can feel the benefits of mutual growth.

Local residents in the relevant areas have expressed their support for the cement industry's social contribution fund, stating that "the industry has faithfully fulfilled its role as a hometown company that has been with the region for a long time" and "we welcome the warm efforts for mutual development with the community."

To ensure transparency and sustainability, the social contribution fund established by the cement industry is kept in a fund account managed by a third party, the Korea Productivity Center (KPC). Once the fund management committees for each region are fully launched, these committees will support and supervise the appropriate allocation of funds to areas in need within their respective regions.

For systematic and continuous social contribution activities that prioritize local public opinion, the cement industry has launched regional fund management committees involving local government officials and resident representatives. The fund management committees for Donghae and Gangneung in Gangwon Province have already been established, and the remaining four regions?Samcheok, Yeongwol, Danyang in Chungbuk, and Jecheon?are scheduled to be launched by November.

The establishment of the social contribution fund by the cement industry is significant in that it is a voluntary initiative rather than legislation or formalization of local resource facility taxes, which have been pursued over the past seven years in Gangwon and Chungbuk provinces. The initiative gained momentum as local members of the National Assembly empathized with the cement industry's intention to directly support areas needed by local residents through discussions with them.

In particular, with the KPC supporting and supervising the use of the fund, local community contribution activities are expected to become more transparent and sustainable, greatly increasing local residents' satisfaction.

A representative from the Korea Cement Association stated, "Since the voluntary fund establishment agreement worth 25 billion KRW was signed last February, we will make great efforts to provide timely and appropriate support with the secured funds to improve the quality of life for local communities and residents."

Meanwhile, despite the cement industry establishing a social contribution fund worth 25 billion KRW annually, it strongly opposes the National Assembly's efforts to re-legislate the local resource facility tax (commonly known as the cement tax) on cement production. The industry argues that "it is unreasonable for the National Assembly to create a local resource facility tax that expands support to areas unrelated to cement plants."

A representative from the Cement Association expressed anger, saying, "For over 20 years, we have paid more than 50 billion KRW in local resource facility taxes on limestone, the raw material for cement, but neither the exact usage nor the beneficiaries are known, and local residents do not feel the benefits. Imposing an additional local resource facility tax of 25 billion to 50 billion KRW annually on cement production is absolutely unacceptable."

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