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Foodpolis will boost local agriculture industry
Lee Jun-won, deputy minister for food industry policy at the Ministry of Agriculture, Food and Rural Affairs, speaks during an interview with The Korea Times at the government complex in Sejong city on Oct. 13. / Courtesy of Ministry of Agriculture, Food and Rural Affairs
By Lee Hyo-sik
By Lee Hyo-sik
The Korea National Food Cluster, also known as Foodpolis, is widely expected to boost the local agriculture industry, once it is completed in 2016, as more than 150 foreign and domestic food firms inside the cluster would source most of their supplies from local farms.
In an interview with The Korea Times, Lee Jun-won, deputy minister for food industry policy at the Ministry of Agriculture, Food and Rural Affairs, said Foodpolis will boost the sales of domestic farms and help strengthen their global competitiveness.
“When it goes into operation in late 2016, the food industry cluster will help increase the sales of local farms and help enhance their production efficiency,” Lee said. “We expect that all the food companies set up in Foodpolis will use locally-grown ingredients in their production of a wide range of value-added goods. The cluster will create a win-win solution for food companies and domestic farmers.”
The ministry will invest a total of $500 million to build the food industry complex on a 2.32 million square meter site in Iksan, North Jeolla Province. The cluster is largely designed to draw companies aiming to export value-added, processed food products.
Foodpolis is projected to churn out $14 billion in output annually and generate 22,000 new jobs as over 150 businesses and 10 research centers will operate there.
So far, 113 companies and research centers, including 52 from overseas, have signed a tentative agreement with the agriculture ministry to set up a presence in Foodpolis.
“The global food industry is projected to reach $7 trillion won in 2020, with the Asia Pacific region accounting for over 40 percent. To capitalize on the region’s rapidly expanding market, Korea decided to set up a mega food industry hub like the Netherlands’ Food Valley,” the deputy minister said. “We believe the food industry hub will more effectively foster innovation in agriculture and help boost exports of agricultural products.”
Korea is at the center of Northeast Asia, which has a total population of 1.5 billion people, he said, adding that Korea’s extensive free trade network with 52 nations across the globe has made setting up a presence in Foodpolis more attractive for multinational firms.
“The food industry is an emerging growth engine for Korea as many traditional manufacturing industries are increasingly losing vitality. In the process, Foodpolis will play a crucial role,” Lee said. “We will complete the construction of the cluster by the end of 2016, during which Korean and non-Korean companies begin operations.”
Harim, Joun Health and three other local firms have signed a contract to purchase a plant site inside the cluster, while Hampton Grains, Gold of Prague and four other foreign companies have filed a report with the government to make investments there, according to the ministry.
A researcher conducts an experiment at a temporary research and development center, set up by the Korea National Food Cluster, at Wonkwang University in Iksan, North Jeolla Province. The cluster operates another research facility at Chonbuk National University in the nearby city of Jeonju. The Ministry of Agriculture, Food and Rural Affairs plans to open three R&D centers inside the food cluster by June 2016. / Courtesy of Ministry of Agriculture, Food and Rural Affairs
Why interested in Foodpolis?
Global food companies have been paying a great deal of attention to Foodpolis for its geographical proximity to key markets, advanced research and development (R&D) and information technology infrastructure, skilled manpower, attractive business incentives and other advantages.
“Besides tax breaks and other administrative support, multinational food firms are particularly interested in Foodpolis as their strategic export base for China, Japan and other Asian nations. The government’s active involvement seems to make the food cluster more appealing,” the deputy minister said. “Many U.S. companies have shown interest in entering the Chinese market via Foodpolis because Korea’s overall business environment is better than that of China.”
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, the ministry said.
Chinese and Japanese manufacturers prefer to use high-quality, safe agricultural ingredients from Korea for their processed food products and then ship the finished products back to their countries, according to Lee, who said made-in-Korea brands are well-received in China and other Asian countries.
“So far, six non-Korean companies have confirmed their plans to set up plants in Foodpolis. We expect more will follow suit because they can create synergy with other firms operating in the cluster and make the use of Foodpolis’ innovative, state-of-the-art research and other support facilities,” he said.
In addition, Korean food firms have expressed interest in setting up in the food cluster in order to strengthen their R&D capabilities and to have an export base, according to Lee.
“Foodpolis will operate three main state-of-the-art R&D centers, each dedicated to ensuring food safety, quality and packaging, to help companies improve their existing products or develop new ones,” he said. “Those who have purchased plant sites in the cluster have already begun developing functional foods targeting the growing number of health-conscious consumers not only in Korea, but also in China and other Asian countries.”
Until the three R&D centers open, the ministry is operating two temporary food research facilities at Wonkwang University in Iksan, North Jeolla Province, and Chonbuk National University in the nearby city of Jeonju.
Researchers at the facilities will work together with those from food companies that will operate in the cluster and conduct several pilot projects.
“We will continue to contact more Korean and non-Korean companies in the coming months to encourage them to establish plants and research centers inside the food cluster,” the deputy minister said. “We will hold a series of road shows in China, Singapore and other countries, and take part in international food fairs to publicize Foodpolis. I have no doubt that the food cluster will be home to more than 150 companies and research centers.”