Government Designates Pohang as an 'Industrial Crisis Area'

Ministry of Industry Designates Pohang City as an 'Industrial Crisis Preemptive Response Area'

Restarted Pohang Steelworks
(Seoul=Yonhap News) POSCO announced on the 27th that thick plate products are being produced at the POSCO Pohang Steelworks 3rd Thick Plate Plant, which resumed operations on the 24th. The photo shows the Pohang Steelworks 3rd Thick Plate Plant. 2022.10.27 [Provided by POSCO. Redistribution and DB reproduction prohibited]
photo@yna.co.kr
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[Asia Economy Sejong=Reporter Lee Jun-hyung] The government has decided to designate Pohang City, which suffered damage from a typhoon, as a proactive industrial crisis response area and provide focused support. Government funds amounting to up to 1.4 trillion KRW are expected to be invested in Pohang City.

The Ministry of Trade, Industry and Energy announced that the Industrial Crisis Response Deliberation Committee has reviewed and approved the designation of Pohang City as a proactive industrial crisis response area for two years from the 31st until October 30, 2024. The proactive industrial crisis response area system is designed to provide concentrated support to regions expected to have suffered significant damage to their main industries due to unforeseen internal and external shocks. It was introduced along with the enforcement of the "Special Act on Regional Industrial Crisis Response and Regional Economic Recovery" in February this year.

The government designated Pohang City as a proactive industrial crisis response area due to considerable damage caused by Typhoon Hinnamnor last month. In particular, POSCO Pohang Steelworks was directly hit by the typhoon, causing a temporary suspension of operations. Pohang City estimates that the total damage from the typhoon, including flooding and damage to the Pohang Steel Industrial Complex, will reach 1.8 trillion KRW.

Pohang City is expected to receive government support amounting to up to 1.4 trillion KRW. Earlier, Gyeongsangbuk-do Province requested the Ministry of Trade, Industry and Energy on the 23rd of last month to designate Pohang City as a proactive industrial crisis response area, estimating the scale of support projects at about 1.4 trillion KRW. Specifically, Gyeongsangbuk-do requested 27 support projects including financial support for POSCO’s small and medium-sized partner companies, emergency infrastructure restoration, improvement of workers’ working conditions, and establishment of facilities and equipment for technology and quality advancement.

POSCO Fully Committed to Restoration Efforts Over the Weekend to Resume Normal Operations at Pohang Steelworks
(Seoul=Yonhap News) POSCO announced on the 18th of last month that 15,000 employees from POSCO and its partners continued flood recovery work at the Pohang Steelworks over the past weekend. The photo shows Pohang Steelworks employees restoring underground facilities in the rolling area (plate mill) severely damaged by flooding. 2022.9.18 [Provided by POSCO. Redistribution and DB prohibited]
Photo by POSCO
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The Ministry of Trade, Industry and Energy will first inject emergency management stabilization funds into Pohang City within this year. Financial support such as loan maturity extensions and repayment deferrals will also be provided. In addition, support projects for overcoming corporate crises, disaster prevention infrastructure construction in the steel industrial complex, short-term research and development (R&D) and commercialization support, and support for the steel industrial complex will be promoted using budgets from next year onward.

Furthermore, the ministry will adjust the basic support rate of Pohang City’s local investment promotion subsidies to the same level as that of special industrial crisis response areas. The government supports a certain percentage of investment costs as local investment promotion subsidies when companies in the metropolitan area relocate their headquarters to local areas or establish or expand factories. For Pohang City, the local investment promotion subsidy rate for small and medium-sized enterprises will increase from the existing 30% to 50% for site investment and from 9% to 24% for facility investment. The ministry plans to revise the related notification within this year.

Meanwhile, this is the first time the government has designated a specific area as a proactive industrial crisis response area. This means that Pohang City has become the first beneficiary of the related system. Pohang was already declared a special disaster area prior to its designation as a proactive industrial crisis response area.

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