Korea eyes food industry as new growth engine
An artist’s concept of the Korea National Food Cluster that will open in Iksan, North Jeolla Province, in 2015. More than 160 food companies and research centers at home and abroad are expected to invest in the industrial complex specializing in food products. The government has pledged to provide various incentives to tenant companies. / Courtesy of the Ministry of Agriculture, Food and Rural Affairs
Food cluster in Iksan lures foreign investors with various incentives
By PArk Si-soo
The government is to kick-start an ambitious food cluster development project in Iksan, North Jeolla Province, planning to have it export products to China, Japan and other Asian countries.
The groundbreaking ceremony of the Korea National Food Cluster is expected to begin on 2.32-million-square-meters of land during the second half of the year with a budget of 553.5 billion won ($499.5 million). It is hoped to transform the typical rural town dotted with rice paddies and historical heritage items into an Asian hub of food companies and research centers by 2015.
More than 60 food companies, including Korea’s CJ Cheiljedang, Dongwon F&B, Nizo Food Research of the Netherlands, Jalux of Japan, SunOpta of Canada and Instantlabs of the United States plan to invest in the country’s first state-supported food industrial complex, also known as “Foodpolis.”
The government is aggressively promoting the project at home and abroad to meet its target of attracting 160 corporate investors, including 30 from overseas. It has pledged to provide investors with an extensive incentive package that includes tax exemptions, state funding support and consultation services. In addition, the cluster will provide employees of tenant companies with a 1.26-million-square-meter residential zone, where they and their family members can benefit from a variety of residential, educational and cultural services.
Companies in the cluster are expected to record 15 trillion won in combined annual sales and create 22,000 jobs, according to the Agency for Korean National Food Cluster.
“The government now recognizes the food industry as an important engine of economic growth,” said Kim Kyung-mee, a director in charge of the food cluster project at the Ministry of Agriculture, Food and Rural Affairs, adding the government plans to develop Iksan as the “Silicon Valley” of the food industry. “The cluster will generate a strong synergy effect by bringing together companies and research and development (R&D) centers on a shared site.”
Companies in the cluster will have access to Beijing, Shanghai, Tokyo and dozens of other cities with populations in excess of 1.5 million and within a two-hour flight time. The government will improve transportation networks for smooth domestic and international logistics.
Kim said Foodpolis will become a unique city full of leading global food companies, cutting edge R&D centers and food industry professionals, which will have a beneficial influence on the nation’s food culture and the food industry.
The export-oriented cluster will target Northeast Asian markets, including China and Japan.
“We envision close collaboration between companies in the cluster and national agriculture and food R&D institutes,” Kim said. “These partnerships will lead to advances in food processing technology, which will then allow commodities produced within the cluster to be exported efficiently through seaports and airports nearby.”
Conference on cluster
The food ministry will host an international conference at Grand Hyatt Hotel in Seoul on Wednesday to promote the cluster to potential investors. More than 100 people from food companies at home and aboard and officials from the ministry and Iksan City will attend to discuss issues under the theme, “Outlook of Global Food Market 2020.”
Andrew Grant, general manager of McKinsey’s global public sector, will deliver a keynote speech on the latest trends in the food and agricultural business. Ad Juriaanse, managing director of NIZO Food Research, will speak about the industrial significance of an R&D cluster under the title, “The World is My Lab,” while Michael Conforme, country manager of PI Korea, will deliver a speech highlighting the importance of human resources in the food business.
Shin Hyun-Soo, director of global food industry business at CJ Cheiljedang, will give a presentation on the firm’s globalization strategy.