Foodpolis attracts foreign food companies
Food cluster to churn out $15 billion output, create 22,000 jobs
Korea is seeking to create a food industry cluster in the southwestern part of the country by 2015 to boost its exports of a wide range of value-added, processed food products. To do so, it plans to attract over 150 local and international food companies and 10 research centers, churning out $15 billion output annually and generating 22,000 new jobs.
The Ministry for Food, Agriculture, Forestry and Fisheries has and will invest $500 million to build the food industry complex named Foodpolis on 3.58 square kilometers in Iksan, North
Jeolla Province. The cluster is largely designed to help increase the nation’s food exports to Japan, China and other Asian nations.
Those operating in Foodpolis will receive tax breaks and other administrative benefits. The ministry has so far signed a memorandum of understanding (MOU) with 62 companies and research centers, including 19 from overseas, who are willing to set up a presence in Foodpolis.
''Korea is expected to export both raw and processed food products worth up to $10 billion this year, up sharply from $7.7 billion in 2011,’’ said Suh Kyu-yong, minister for food, agriculture, forestry and fisheries. ''The country will likely join the global top 10 food exporters, with its outbound shipments of crops, fisheries and processed food products projected to reach over $30 billion by 2020.’’
To achieve such an ambitious goal, Korea should help nurture globally-competitive food companies, the minister said, stressing that it should learn from countries such as the Netherlands and Denmark, which earn large sums of hard currency by shipping high value-added agricultural products.
The Netherlands has created a mega food industry hub named Food Valley in which over 70 global food companies and 20 research centers operate, producing an annual output of $64 billion and employing thousands of workers.
''We would like to create one similar to Food Valley to foster the food industry as our next growth engine. The global food industry is projected to reach $6.4 trillion won in 2020, with the Asia Pacific region accounting for 40 percent,’’ Suh said. ''This presents us with a golden opportunity to jumpstart our economy. If we create Foodpolis successfully, we will become a global food industry powerhouse.’’
The minister then said there are many reasons why multinational food firms must establish a foothold in Asia’s fourth largest economy.
''Korea is at the center of Northeast Asia where there is a population of 1.6 billion. It takes less than two hours from Incheon International Airport to reach 60 major cities that have populations of over 1 million,’’ Suh said. ''Besides its geographical proximity, advanced information technology infrastructure, skilled manpower, attractive business incentives and many other favorable attributes have and will continue to draw global food producers.’’
Notable investments in Foodpolis
A total of 62 companies and research institutes, including 19 from abroad, have so far expressed interests in establishing a presence in the food cluster.
On Dec. 12, Canadian food company SunOpta signed an MOU with the agriculture ministry to create an Asian production base in Foodpolis. Two days earlier, U.S. bio research firm Instant Labs also signed an agreement to establish a foothold in the cluster.
On Dec. 7, Japanese food firm Jalux signed an MOU to build a vegetable processing plant on 33,000 square-meters of land by 2015 in order to produce in-flight meals and other value-added products.
Among domestic companies, the agriculture ministry singed an MOU with Dongwon F&B on Oct. 30. The world’s largest canned tuna maker pledged to build a manufacturing plant and a research facility on 66,000 square-meters of land inside Foodpolis.
In September, the food cluster also received a much-needed boost from CJ, the country’s largest food company, which promised to invest over $18 million to build the state-of-the-art production and research facilities.
The firm aims to set up operations in the Foodpolis as an export base targeting China as a growing number of increasingly wealthy consumers there will consume high-quality food items produced here.
''CJ’s planned investment is widely expected to encourage more food firms at home and abroad to establish a foothold in Foodpolis,’’ said Park Jong-guk, chairman of the Korean National Food Cluster Support Center, which oversees the construction and operation of Foodpolis.
He said the center will continue to promote the food cluster overseas. ''We will focus more on investor relations activities in 160 foreign countries to attract global food firms to establish their operations here. Foodpolis will churn out food products valued at $4 billion and create 22,000 new jobs when completed.’’
Park stressed that global food companies must establish a foothold in Foodplois if they want to tap into Asia’s rapidly growing consumer market.
''The food cluster is a state-financed project, meaning it will be constructed as planned regardless of macroeconomic conditions. This makes it easier for businesses to plan ahead and establish a plant. Additionally, we are offering a wide range of financial and administrative incentives to those investing in Foodpolis,’’ he said.
Companies are exempted from paying corporate income tax for the first three years. They will then receive a 50-percent reduction for the following two years. Investors are also exempt from property holding taxes for 15 years.
''Korea has the top-notch industrial infrastructure. Foreign food makers can take advantage of low utility and other public service charges. Foodpolis will also be equipped with foreign schools, hospitals and other urban facilities, creating an optimal residential environment,’’ Park said.
In North Jeolla Province, many vocational high schools and universities deal with the areas of agriculture, livestock, fisheries and processed food products, meaning that Foodpolis investors can secure talented workers and researchers from a huge pool of highly-educated students.
''The food cluster is ideally located to ship products all over Korea. At the same time, it is easy to tap into China, Japan and Southeast Asian nations via sea and air. Foreign food product makers can use Foodpolis as their Asian export base,’’ Park said. ''Korea has signed a free trade agreement with 47 countries, including the U.S. and Europe. They can easily ship products to non-Asian markets thanks to low tariffs and simplified customs procedures.’’
Foodpolis will also be equipped with the necessary industrial and residential infrastructure.
''We will not only build production and research facilities but also other installations to support business activities, treat wastewater and provide a stable supply of electricity at a low cost. A state-of-the-art residential complex will also be constructed,’’ the chairman said.
Foodpolis will create a comprehensive research and development (R&D) center where companies can use expensive equipment free of charge. ''We will open our research center to all firms operating in the food cluster. We will also offer them R&D funding,’’ Park said.
For more information on Foodpolis, visit its website (http://www.foodpolis.kr/index.do) or call the Korean National Food Cluster Support Center at 82-2-507-8264 or 82-1688-8782.