US and Japanese Companies Look to Invest in Gyeonggi Province (September 14, 2011)

[Promoting Investment in Gyeonggi Province] Part 2 Trip to North America and Japan
USD 50 million in total investments; more overseas business opportunities

– Gyeonggi Province’s delegation, headed by Governor Kim Moon-soo, visited North America and Japan in 2011, inducing USD 50 million in total investments. On April 19, Governor Kim visited the GE headquarters in Connecticut, USA, where he signed an agreement with President James Suciu worth USD 30 million and exchanged gifts. (GNews Plus)

There is a saying to the effect that ‘rich families last three generations even if they go bankrupt.’ This adage applies to the US and Japan when looking at the international economic flow. No matter how bad the economy is, and even after a series of disruptive natural disasters, the two countries are still the most economically influential in the world.

They are also key investors in Gyeonggi Province. Companies from the US and Japan are the two biggest investors. That is why the local government sends delegations to these two countries every year.

The same was true in 2011. Governor Kim Moon-soo and local representatives visited the US and Canada on an eight-day trip to North America. More recently, in July, they went to Japan to attract investment. What were the results? As always, more than they expected.

USD 212 million in MOUs with US Corporations

Agreeing on USD 212 million in investments, discussing national security and unification with overseas experts, opening the Gyeonggi Global Medical Business Center and LA-Gyeonggi Textile Center

Listed above are the achievements of the North American Investment and Trade Delegation from Gyeonggi Province that covered the area for eight days from April 17th to 24th. They found new investors, expanded overseas markets, established a foothold for the fashion industry, and furthered positive relations. This will stimulate the local economy by creating new jobs and expanding exports for small and medium businesses in Gyeonggi Province.

The delegation’s mission in North America was to attract more investment. Beginning in Vancouver, Canada, they then visited New York, Connecticut, Detroit, and Los Angeles in the United States, securing USD 212 million in investments from five different overseas companies. They even had a chance to engage in in-depth discussions with foreign specialists on Korea-US relations and the FTA.

At their first stop in Canada on April 17th, the delegation secured a USD 50 million investment from the IP solutions company Moimstone, which distributes IP phones to major companies such as LG, SK, and KT, dominating the Korean market despite its small size.

Moimstone plans to build an internet phone R&D center and manufacturing plant in Anyang City and to export phones to Japan and India. This deal will lead to the recruitment of 72 people, and 389 more indirectly by 2015. The chairman of Moimstone, Lee Chang-u, emigrated to Canada with nothing but his know-how. Experts believe he has created a new investment model by reinvesting in his home country.

– Governor Kim and the delegates pose for a commemorative shot after signing a USD 2 million MOU contract with Neo at the Sheraton Hotel in Detroit, Michigan, USA on April 21st. Vice-president Jeffry Bedford and other board members of Neo can also be seen in the picture. (GNews Plus)

Investments peaked when the delegation entered the United States. The group signed an investment agreement with an industrial gas manufacturer in Connecticut, USA, on April 19th.

This company is set to invest USD 100 million in a separate lot in Yongin (foreign direct investment of USD 30 million) to build a nitrogen gas plant, which is vital for the semiconductor, LCD, and LED industries. This will lead to the hiring of 16 people directly and 2,268 people indirectly. The construction of this plant will secure a steady flow of materials for major semiconductor and LCD manufacturers such as Samsung Electronics.

On the same day, the delegation signed another investment agreement worth USD 30 million with the global conglomerate GE to establish a green industry technology R&D center. GE will complete setting up in the Pangyo Global R&D Center by March 2012 and will undertake research and development work for energy software, smart grids, electric vehicles, water treatment, wind power, and other green industries on six of its floors.

The center is forecast to boost national export through its commercialized models. Not only will this research center hire hundreds of people, it will also purchase USD 10 million in supplies annually, starting at the end of 2012, thereby stimulating the local economy.

Moving on to New York on April 20th, the delegation signed an investment agreement worth USD 30 million with Molex, the world’s largest electric connector company. Molex will build a manufacturing plant in the Banwol Complex of Ansan on a 13,926 square meter lot and develop super-slim electric connecters for use in computers, cell phones, and LCDs.

Molex, which first set foot in Korea in 1984, will hire 400 more people during the current expansion. It is expected to manufacture KRW 2.17 trillion worth of products in the first five years, replacing KRW 54 billion in imported goods. Future electronics may become much more compact following Molex’s investment.

In Detroit on April 21st, the delegation persuaded Neo, a manufacturer of base materials for semiconductors used in LEDs, to invest USD 2 million. The IT company is based in Canada and is the largest producer of magnetic powder extracted from rare minerals for the manufacture of micro motors. Neo is also the second largest producer of rare earth resource-based materials.

Neo agreed to invest USD 2 million in 2011 to build a manufacturing plant on a 3,305 square meter lot in the Hyeongok Complex of Pyeongtaek City for the production and distribution of GaCl3 needed to manufacture LEDs. 

Korea’s LED industry, which is expanding by 30% annually, is considered hugely promising. Therefore, Neo’s agreement to produce and distribute a core LED material, GaCl3, is a meaningful event. This turn of events will replace KRW 121 billion in imports over the next five years. The related industries will be able to produce KRW 243 billion over the same period (KRW 48.8 billion per annum).

Governor Kim visited GM Hyundai Mobis’s Ford Museum during his stay in Detroit to evaluate the future prospects of the recovering US automobile industry, which has undergone changes in labor and management, bold restructuring, a 50% reduction of wages, and dramatic changes in terms of model designs. Governor Kim thought it could be the key to finding a direction for Korea’s automobile industry.

He said, “My goal is to create new jobs and stimulate Gyeonggi Province¡¯s economy by importing cutting-edge technology. I learned how important it is for us to communicate with the rest of the world in order for Gyeonggi Province and Korea to be more competitive.”

Japan, Still Alive and Well

– Governor Kim Moon-soo and Valqua Industries President Toshikazu Takisawa pose for a picture after signing an MOU at Valqua’s headquarters in Tokyo on July 20th. (GNews Plus)

Japanese companies have always made investments in Gyeonggi Province, second only to companies from the US. Gyeonggi Province’s representatives have visited Japan five times since the 2010 local elections, establishing agreements with thirteen companies worth USD 528 million in total.

Forty-one of the 85 companies that are currently operating in the eight industrial complexes of Gyeonggi Province are Japanese, accounting for 48% in total. Their investment amounts to KRW 832 million, which represents 71% of the total investment of KRW 1,171 million.

The local government has devised strategies to attract more Japanese investors by providing more incentives. A task force team comprised of private specialists and buyers of major companies is maintaining these strategies and formulating more. On July 19th and 20th, Gyeonggi Province’s delegates visited Japan where they secured total investments of USD260 million. This was the result of the unseen efforts of the TF team. 

Governor Kim and the delegates went to Tokyo, Yokohama, and Osaka to participate in electronics, IT, and semiconductor-related investment presentations. Their focus was to promote Pyeongtaek, a new industrial area. The government was able to secure USD 267.3 million in investments as a result.

When the delegates reached Tokyo and Yokohama, they signed investment MOUs with Sumitomo Chemical (Tokyo), JTEKT (Osaka), and Valqua Industries (Tokyo) worth USD 237.3 million.

The three companies manufacture parts for mobile phones, vehicles, and semiconductors. It is projected that these investments will lead to the recruitment of 248 people in Gyeonggi Province.

The three investment zones in Pyeongtaek are the Poseung Complex, Hyeongok Complex, and Oseong Complex. Local and overseas companies have been eyeing Pyeongtaek ever since Samsung decided to invest in the Godeok Complex last December.

Sumitomo, which is responsible for 90% of the total investment coming from Japan at USD 240 million, will build a next-generation touch sensor panel for cell phones in the Poseung Complex under its Korean investment corporation, Dongwoo Fine-chem, hiring 80 people.

The next-generation touch pad that Sumitomo is scheduled to manufacture next year is a device that will determine the future of smart phones and tablet PCs. It is also expected to enhance the competitive edge of Korean smart-phone manufacturers such as Samsung.

One out of every three mobile phones is equipped with a touch pad nowadays, following the explosive popularity of smart phones. It is possible that Gyeonggi Province will become a manufacturing center for smart-phone materials.

JTEKT, another Japanese investor, signed a USD 17.3 million investment agreement (USD 13.3 million in direct investment) and is expected to build an automobile water-pump bearing plant by the beginning of next year in the Hyeongok Complex. The plant will hire 108 people.

Valqua Industries has invested USD 10 million in the construction of a semiconductor material manufacturing plant in the Oseong Complex, and will hire 60 people. Valqua Industries had already begun to build the plant by the 2nd of September, barely two months after signing the MOU. The construction work will be completed in February next year. After a short trial operation, it will start manufacturing equipment needed to make semiconductors in March.

The provincial government went to Yokohama on the 20th where they hosted the Gyeonggi Province Parts and Materials Investment Environment Presentation with the participation of 150 workers from 40 local companies.

The presentation focused on attracting Japan’s electronics, IT and semiconductor materials manufacturers. Samsung Electronics’ and LG Display Co., Ltd.’s buyers were the key representatives, which attracted even more interest. Sumitomo, a company that has already successfully settled in Gyeonggi Province, was introduced as a model to boost the attraction.

Governor Kim Moon-soo, speaking of the investment activities with these companies, said that: “Gyeonggi Province is hardly recognized compared to Samsung and LG. That is why we have a better chance of boosting investments in collaboration with large corporations. The company can search for more cutting-edge partners while we get more investment. It is a win-win strategy.”

– Toshihisa Sumimoto (center), director of Sumitomo Chemical, Governor Kim (left), and Pyeongtaek Mayor Kim Sun-ki (right) chatting before the singing of the USD 240 million investment MOU at Sumitomo Headquarters in Sinagawa, Tokyo on July 20th. (GNews Plus)

– GNews Plus News | Nam Gyeong-u echo2008@kg21.net 

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