Jeonnam Province Applies for Designation of Gwangyang as Preemptive Response Industrial Crisis Area

Crisis Deepens Due to Heavy Reliance on Steel Industry
Efforts Underway to Develop Customized Support Projects

Aerial view of Gwangyang Steelworks. Provided by Jeonnam Province

Jeonnam Province announced that it has officially requested the Ministry of Trade, Industry and Energy to designate Gwangyang City as a Preemptive Response Industrial Crisis Area.

This application aims to proactively address the regional economic crisis caused by the heavy reliance on the steel industry in Gwangyang City and to secure systematic government-level support.

The Gwangyang National Industrial Complex has an extremely concentrated industrial structure, with the steel industry accounting for 88.5% of production and 97.6% of exports. Over the past two years, a combination of global oversupply, increased imports of low-priced Chinese products, and sluggish domestic demand has led to a significant decline in steel sales and production, spreading a sense of crisis throughout the local economy.

In fact, as of the second quarter of 2025, the production value of the primary metal industry in the Gwangyang National Industrial Complex decreased by 9.43% compared to 2024 and by 7.45% compared to 2023. POSCO Gwangyang Steelworks also saw a decline in sales across all major products, and local partner small and medium-sized enterprises experienced simultaneous drops in sales, production, and operating profit.

Population outflow among young people, stagnation in commercial districts, and a decrease in new hires are rapidly progressing throughout the local community. The vacancy rate in major commercial areas of Gwangyang-eup stands at 17.2%, significantly higher than the national average of 10.2%.

Along with this designation application, Jeonnam Province has proposed to the government a total of 387.1 billion won in customized regional support projects over five years from 2026 to 2030. Key projects include: ▲ steel R&D and manufacturing innovation technology development ▲ support for employment stability and workforce training ▲ financial support for small and medium-sized enterprises ▲ issuance of local gift certificates and projects to revitalize local commercial districts ▲ regeneration of aging industrial complexes and establishment of an AX Support Center.

Kim Gihong, Director of Strategic Industries at Jeonnam Province, emphasized, "Since the steel industry is a national key industry, the crisis in Gwangyang City is a crisis for national competitiveness," adding, "Proactive government intervention and support are urgently needed at this time." He continued, "Jeonnam Province will mobilize all administrative resources to restore the regional industry and secure future competitiveness."

The decision on whether to designate the area as a Preemptive Response Industrial Crisis Area is expected to be finalized after an on-site inspection by the Ministry of Trade, Industry and Energy this month and a review by the Industrial Crisis Response Committee in November.

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