Cheonan, the largest city in Chungnam, which experienced difficulties in attracting businesses due to the central government's continued deregulation in the capital area, has shifted attention to foreign capital, with subsequent progress in job creation and revitalization of the local economy. Despite the fiscal crisis of some European countries, the recession of the US economy and the slowed growth of China, Korea's largest trade partner, Cheonan achieved the largest amount of foreign investment last year, since 2008 when the global financial crisis broke out.

▲ Advantest of chunan factory.

As the city's 5th General Industrial Complex has been selected as an excellent project to attract cutting-edge parts and materials manufacturers, in a contest of foreign capital projects which was held in April, hosted by the Ministry of Industry, Commerce and Resources and organized by KOTRA, Cheonan's plan to boost its industrial complexes through foreign capital is expected to gain further momentum.


Foreign Capital Inflow Triples in Five Years


According to the Cheonan city government, the volume of foreign investment to the city last year was 267 million dollars, an over threefold increase in a five-year period from 80 million dollars by two companies in 2008.

The combined foreign investment in Cheonan in the recent five years amounts to 751 million dollars by 13 companies: three companies (UK's Edwards Group, Taiwan's TTY and Germany's LS Power Semitech) investing total 158 million dollars in 2009, two companies (US MEMC and Dow Chemical) investing total 145 million dollars in 2010, two companies (Dow Chemical and Belgium's Umicore) investing total 101 million dollars in 2011 and four companies (US MEMC, Japan's Miura, Fuji Film and Advantest) investing total 267 million dollars last year.

Most of the foreign investment went to high-tech areas including secondary cell battery materials, industrial pumps, pharmaceutical products, semiconductors, displays and electronic materials. Investors are based in the UK, Belgium, Taiwan, Germany, the US and Japan, among others.

Miura, the Japanese industrial boiler maker, has kicked off construction on its 36,000 square-meter site in Pungse Industrial Complex. Fuji Film, a Japanese manufacturer of electronic materials such as photosensitizers and image sensors has started operation in full swing in the 2nd Industrial Complex.

Advantest, the semiconductor testing equipment producer, is building its plant on the 39,600 square-meter site that it has secured in the recently expanded 3rd Industrial Complex of Cheonan.

The increasing foreign investment has brought about a proportionate increase in employment; 2,815 have been hired in the recent five years, including 145 in 2008, 724 in 2009, 900 in 2010, 426 in 2011 and 620 in 2012.

The growing inflow of foreign capital is attributed to the designation of the 155,000 square-meter area in the 3rd Industrial Complex (established across Chaam-dong and Seongseong-dong, Seobuk-gu) as a foreign investment zone, along with strategic efforts to invite overseas businesses.


5th Industrial Complex Wins Government Funding for Foreign Investment Promotion

The 5th Industrial Complex, designated as a foreign investment complex late last year, has qualified for a commercialization support fund of 100 million Won from the central government, after being named as a project of excellence in attracting foreign capital. 

In a contest of foreign capital projects which was held for municipalities and free economic zones nationwide, hosted by the Ministry of Industry, Commerce and Resources and organized by KOTRA, total nine projects (two primary local governments including the city of Cheonan, five metropolitan governments and two organizations including Busan-Jinhae Free Economic Zone Authority) were selected and qualified for a total of 800 million Won government funding.

With both government and provincial funding of 83.4 billion Won, the ongoing construction of the 336,208 square-meter foreign investment area in the 5th Industrial Complex (located across Seongnam and Sushin areas of Cheonan) is scheduled to be completed in the end of June.

The industrial ministry has selected projects with potential contribution to the national economy and feasibility to attract foreign investment, to grant them 70 percent of the total cost of commissioning a specialized consulting agency to perform analysis of profitability and marketing strategies, necessary for investment negotiations.

In its proposal, the Cheonan city government highlighted, in addition to its efforts to invite foreign investment, the high tech industrial complex, part of Cheonan Inter-techno Valley scheduled to be constructed across Jiksan and Seonggeo district, in connection with the International Science Business Belt Cheonan Functional District.

To facilitate foreign investment in areas of high-tech parts, automobile, electrical/electronics, machinery/equipment and chemical, the city, in partnership with the Chungnam provincial government, is targeting parts/materials companies in Germany and Japan in their marketing activities. The central government funding is expected to help Cheonan broaden the scope of its activities, with the support of the industrial ministry and KOTRA.