Jeonbuk Defense Industry 'Vulnerable'... "Must Not Miss Out on Hyundai Rotem's Muju Investment"

Provincial Councilor Yoo Songyeol flags weak industrial foundation during provincial policy questioning
Urges designation as an Opportunity Development Zone and efforts to attract partner companies
Province to specialize in carbon composite materials and pursue Opportunity Development Zone designation

With the industrial foundation for Jeonbuk’s defense industry remaining weak, accounting for just 0.58% of national sales, some have warned that the region could miss an opportunity to develop its defense industry if Hyundai Rotem’s investment in Muju fails to produce results.

Yoo Songyeol, a member of the Jeonbuk Special Self-Governing Provincial Council (Muju).

On the 14th, during a provincial government policy question session at the 432nd extraordinary session, Yoo Songyeol, a member of the Jeonbuk Special Self-Governing Provincial Council (Muju), pointed to the low competitiveness and weak industrial structure of Jeonbuk’s defense industry. He urged the province to focus its support capabilities on ensuring that Hyundai Rotem, which is pursuing an investment of 300 billion won in the Bangi District of Muju County, can establish a stable presence in the region.

According to data presented by Yoo, Jeonbuk has only four defense-related corporate headquarters (0.85% of the national total), nine factories (2.59%), and six research institutes (2.40%). Defense industry sales totaled 167.9 billion won, just 0.58% of national sales.

This means Jeonbuk accounts for less than 1% of the national defense industry market. The region has a limited presence nationwide not only in corporate headquarters and research institutes but also in sales, and some say its industrial foundation is insufficient to make the defense industry a new growth engine for the region.

In particular, Jeonbuk’s defense industry sales are concentrated in factory production, and an industrial ecosystem for developing materials and components, verifying their performance, and turning them into high-value-added products has yet to take shape.

Yoo warned that without a research and development (R&D) hub for testing material performance, Jeonbuk could remain a subcontracting base supplying raw materials and simple components to defense companies in other regions.

In this context, Hyundai Rotem’s investment in Muju is seen as an important opportunity for Jeonbuk’s defense industry to establish a new foundation.

Hyundai Rotem is pursuing a project to invest 300 billion won in the Bangi District area of Muju County and build an integrated aerospace production base. Expectations are that the project could create a foundation for advanced manufacturing in Muju, where agriculture and tourism account for a large share of the economy, and help expand Jeonbuk’s defense production capacity and related industries.

However, turning the large-scale investment plan into actual regional economic growth will require addressing numerous challenges, including securing land, obtaining permits, developing an industrial complex, and attracting partner companies. Some say the project’s success may depend on how quickly Jeonbuk resolves administrative and institutional issues that would be difficult for the investing company to handle on its own.

Yoo called on Jeonbuk to prepare three support measures to ensure Hyundai Rotem’s investment does not remain merely an agreement or plan: designating an Opportunity Development Zone to secure investment incentives, including tax benefits; establishing an administrative support system to expedite compensation for privately owned land and various permits; and developing a dedicated industrial complex to accommodate first- and second-tier suppliers relocating alongside Hyundai Rotem.

In response, Jeonbuk said it would specialize in carbon composite materials and establish an integrated, end-to-end support system connecting material development, component development, testing, and commercialization.

The Jeonbuk provincial government’s Future Advanced Industries Bureau said, “To help produce defense innovation companies in Jeonbuk, we will establish a ‘Jeonbuk-style virtuous-cycle defense industry management system,’ with the Defense Innovation Cluster project team, the project’s implementing body, at its center. This will include regular performance consultations and prioritizing follow-up projects for outstanding companies.”

The Jeonbuk provincial government’s Corporate Attraction Support Office said, “We are supporting administrative procedures, including industrial complex development and permits, in cooperation with Hyundai Rotem and Muju County, and are working to build an industrial ecosystem by helping the company flesh out its detailed investment plans and facilitating the relocation of partner companies alongside it. We will consider commissioning a research study on designation as an Opportunity Development Zone and work closely with the Ministry of Trade, Industry and Energy to ensure the designation proceeds smoothly.”

This content was produced with the assistance of AI translation services.