Gumi looks beyond semiconductors

Mayor Nam says many Japanese companies looking to relocate to Korean city


For Gumi, Korea’s Silicon Valley, making sure that foreign direct investment keeps flowing into the city is a daily endeavor.

To highlight the city’s appeal as a high-tech powerhouse, Herald Media organized a trip for commercial attaches so that they could get a firsthand account of a city that is a model for overcoming the crisis and fueling the nation’s economy.

Gumi’s national industrial complexes were established with the goal of becoming a center for major industries including electronics and semiconductors.

At present there are four complexes with a fifth being established.

But the secret to Gumi’s success is found in Mayor Nam Yoo-chin, who keeps reinventing his city but maintains the undercurrent of a high-technology-based green city.

To overcome the impact of the financial crisis, in 2009 Nam implemented the “We Together” campaign which, at its core, is a campaign that puts both employer and employee in the driver’s seat.

“According to the campaign, we could keep the same level of employment because the employers promised not to lay off any workers if the employees took a salary cut,” he told The Korea Herald.

“If the company kept its promise with their employees, then the government would provide financial aid in the form of a low-interest loan of 5 percent. So in 2009, we spent 110 billion won for this financial aid program for 500 companies.”

The program was so successful it was heralded by the Blue House and economists as a model for success.

“The ‘We’ campaign was so successful it increased employment by 11 percent,” he noted.

But resting on his laurels is not the mayor’s style.

He visited Germany in February to sign five memoranda of understanding with German advanced medical equipment companies.

“They recognized that Gumi is at the center of the IT industry so that’s why they have shown interest in us for the manufacturer of medical devices,” Nam said.

The other new growth engine for the city is in an industry that promises to become the highlight for the future.

Leading the way is Toray Advanced Materials, which recently held a ground breaking ceremony at the Gumi 4th National Industrial Complex for construction of its carbon fiber plant.

Toray plans to invest a total of 1.3 trillion won to build production facilities for carbon fiber and other high-tech products, the largest-ever foreign investment in the North Gyeongsang region.

Nam explained that carbon fiber weighs just 25 percent of the same volume of steel and is 10-fold stronger.

“This carbon material will be used in Boeing airplanes and Mercedes-Benz cars,” he said.

The materials produced by Toray will also be used in aerospace, electrical and electronic equipment, eco-friendly energy products and much more.

Toray is just one of the many Japanese companies looking for a new home in Gumi.

“Gumi is close to Japan, and its geographical benefits are ideal for producing sensitive devices and materials,” he said. “Plus, they like Gumi’s manpower because it is as good as Japanese engineers but costs less in salary.”

During the two-day trip, commercial attaches gathered information on the Digital Electronics Technology Complex, or the 4th Gumi National Industrial Complex, where parts and materials are produced in an exclusive zone.

During the forum, city officials explained that foreign and local investors that operate in the free economic zone target the advanced information technology industry, mobile communications, research and development centers. And the zone houses international educational facilities, international hospitals and residences for foreign nationals.

Even though Gumi is not as well-known a free economic zone as Incheon, Daegu and Busan, Nam is looking toward the future.

“In 2012, we will put all our efforts to become a stronger FEZ area because right now, all our efforts are put into completing the 5th industrial complex which is more important for us right now,” said Nam.

“We believe we will be the leader of FEZs except for Incheon because they were designated first,” he said. “But we already have developed the area which gives us a strong edge.”

By Yoav Cerralbo (yoav@heraldcorp.com)