Incheon City Pours 47.7 Billion Won into Supporting Root Industries Amid 'Triple Crisis' to Promote Employment Stability

Support for Strengthening Capabilities of Sobujang Companies and High-Purity Rare Metal Processing

Root Technology Research Institute [Provided by Incheon City]

[Asia Economy Reporter Park Hyesook] Incheon City is making every effort to support the root industry, which is facing a triple crisis due to soaring raw material prices, interest rate hikes, and worsening labor shortages.

The root industry forms the foundation of manufacturing quality competitiveness in process technology fields such as casting, mold, plastic processing, welding, surface treatment, and heat treatment. However, with the increase of apartments due to new towns and large-scale housing developments, manufacturing factories have lost their place, and the steep rise in factory site rents has encouraged companies to leave Incheon. The impact of COVID-19 has also accelerated the stagnation of the root industry.

As of the end of 2020, there were 3,227 root industry companies in the Incheon area, accounting for 10.6% of the 30,553 nationwide, with annual sales of 13.5958 trillion KRW, representing 8.9% of all root companies.

The sales scale of Incheon root companies is dominated by those under 5 billion KRW at 86.6%, among which micro-enterprises with sales between 500 million and 1 billion KRW account for 13.3%, the highest in the country. This has contributed to the stagnation of growth and weakening competitiveness of Incheon root companies.

Accordingly, Incheon City is strengthening the competitiveness of the root industry and supporting employment stability for workers by advancing the root industry, purifying rare metals, and establishing a demonstration support center for materials, parts, and equipment (SoBuJang).

First, the city plans to invest 47.7 billion KRW over five years through the Ministry of Employment and Labor's 2020 public project ("Root Industry Leap, Better Tomorrow") to advance the root industry and create 7,750 jobs.

This year, support will be expanded by adding eight new advanced material sectors to the existing six root industry sectors, shifting from company-centered support to crisis worker support. A total of 7.123 billion KRW will be invested in creating a self-sustaining root industry ecosystem and stable job security projects, aiming to create 1,336 jobs.

Last year, targeting 1,400 jobs, the city achieved 116.1% (1,626 jobs) and is currently operating the "Digital Root Master Education Center," which digitalizes the skilled techniques of root industry masters to establish a systematic transmission system.

In the June 1 local elections, Incheon Mayor Yoo Jeong-bok, who pledged to establish a rare metals industry base and support the root industry, visited Halla Cast Co., Ltd., a root company in Namdong Industrial Complex, on the 28th of last month, three days before his inauguration, to receive an explanation about their products. 2022.6.28 [Provided by Incheon City]

In the second half of this year, the "SoBuJang Demonstration Support Center," a core hub for strengthening the technological capabilities of materials, parts, and equipment companies, will open.

The center will serve as an incubator supporting technology development for small and medium-sized SoBuJang companies in the Namdong Industrial Complex, providing services such as new technology demonstration, original technology development, and customized overseas technology introduction for companies.

As of 2019, SoBuJang accounts for 51% (796 trillion KRW) of the total manufacturing production value (1,553 trillion KRW), driving manufacturing production, added value, and employment.

Incheon’s SoBuJang industry has 2,138 businesses, accounting for 7.4% of the 28,908 nationwide, with 84,083 employees and production value of 31.0976 trillion KRW, representing 5.9% and 3.7% of the national figures, respectively.

The city is also supporting the rare metal industry by promoting a demonstration base for rare metal purification.

Rare metals, which collectively refer to 35 types including indium, potassium, and rare earth elements, are essential raw materials for advanced industries such as semiconductors and secondary batteries, determining product quality and performance. However, global reserves are extremely limited. South Korea heavily depends on imports, causing manufacturing added value to leak out, and the unstable international situation has led to soaring raw material prices, making solutions urgent.

Incheon City has equipped the Korea Institute of Industrial Technology’s Rare Metal Industry Technology Center at the Mark One Knowledge Industry Center in Namdong-gu with equipment for pilot production of purified rare metals and is providing related technical services.

In particular, the city is focusing on building a demonstration base for purification of rare earths and high melting point, high activity rare metals, supporting technology commercialization for companies and establishing certification systems.

Through strengthening the rare metal value chain (procurement, production, logistics, management support, sales), the city expects to secure an independent industrial system against issues related to high-purity rare metal raw materials and materials, such as the US-China rare earth dispute and Japan’s export regulations.

An Incheon city official said, "Manufacturing is the root industry of Korea as well as Incheon. We will continue to provide a solid foundation for small and medium-sized manufacturing companies so that the root economy can be strong and lead the regional economy."

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