South Korea Monday scrapped its plan to move some ministries to Sejong City in the central part of the country and announced that it will instead turn the new city into a business and science hub where leading South Korean conglomerates set up operations.
Samsung, Hanwha, Woongjin and Lotte have signed accords with the government to launch business operations in the new city, Prime Minister Chung Un-chan said Monday. Korea University and KAIST will set up campuses there.
In 2005, then President Roh Moo-hyun decided to relocate nine ministries and four subsidiary agencies to the planned city, located some 150 kilometers south of Seoul, beginning in 2012 as part of a presidential campaign pledge to promote balanced regional development.
According to the revised plan, the four South Korean conglomerates will invest 4.38 trillion won ($3.87 billion) to set up manufacturing and research facilities in Sejong City.
Samsung Group, South Korea's largest conglomerate, will make the largest investment of 2.05 trillion won to develop new businesses there. The world's top memory chipmaker and manufacturer of liquid crystal displays (LCD) will be allotted 1.65 million square meters of land.
Hanwha Group, which follows Samsung in terms of the size of investment, is to spend 1.33 trillion won to create operations over the tract of 600,000 square meters.
The group's business interests include chemicals, explosives, insurance and construction. Hanwha, South Korea's 10th-largest conglomerate, is expected to install R&D and manufacturing facilities for its new solar energy and defense businesses, hiring 3,044 employees.
Woongjin Group, whose business portfolio ranges from publishing to chemicals, plans to invest 900 billion won in an area of 660,000 square meters. Its flagship, Woongjin Coway, a maker of water and air purifiers, plans to set up a joint laboratory with affiliates Woongjin Energy Co. and Woongjin Chemical Co. The group plans to employ 2,650 people.
Lotte Group, the fifth-largest conglomerate, will invest 100 billion to create 1,000 new jobs.
Prime Minister Chung said the completion of Sejong City will be made by 2020, 10 years earlier than initially scheduled, with a population of nearly 500,000.
SSF of Austria, a manufacturer of solar power cell modules, plans to spend 138 billion won on a Sejong City venture, making it the sole foreign investor so far.
The government it will make Sejong City the center of a so-called international science business belt that would attract up to 17 trillion in new investment in the next 20 years.