Gyeonggi Province's Proposal Pays Off... Restrictions on Ancillary Facilities at Industrial Complexes to Be Eased

As the government has accepted Gyeonggi Province’s long-standing proposal to ease restrictions on the installation of ancillary facilities by companies located in industrial complexes, local businesses are expected to have more room to expand factories and logistics facilities.

Gyeonggi Province said on the 12th that it had been informed by the Ministry of Trade, Industry and Energy of plans to revise the relevant guidelines to allow companies in industrial complexes to install ancillary facilities, such as warehouses, on sites separate from their existing factories.

Until now, companies in industrial complexes could install ancillary facilities such as warehouses only on sites adjacent to their existing factories. As a result, they have struggled to secure land or had to bear unnecessary logistics costs. If no suitable site was available near a factory, expanding facilities was difficult, and companies had to shoulder the additional costs of using off-site warehouses.

Gyeonggi Provincial Government

A company in the Namyangju Industrial Complex is a case in point. The company sought to add a refrigerated warehouse next to its factory but, unable to secure the land, tried to build one at a separate site. However, this too proved impossible because the current Industrial Complex Management Guidelines restricted sites for ancillary facilities to locations adjacent to existing factories. The company ultimately outsourced the storage of its products to an off-site warehouse, spending about 840 million won a year.

Once the guidelines are revised, the company will be able to install a refrigerated warehouse on a site separate from its existing factory and is expected to save about 420 million won a year in outsourced storage costs.

Gyeonggi Province proposed easing the relevant regulations twice starting in 2024, but both times received responses saying the proposals were “difficult to accept,” citing concerns about speculation in industrial land. The province then reconfirmed the difficulties faced by businesses and developed measures to prevent speculation, including allowing factory leases. After continued consultations with the Ministry of Trade, Industry and Energy, it secured the regulatory changes.

Gyeonggi Province plans to expand regulatory improvements that businesses can feel in practice, including by continuing discussions with central government ministries based on real-world cases and the proposed solutions it has developed.

Kim Baeksik, head of Gyeonggi Province’s Regulatory Reform Division, said, “To address the difficulties businesses face, it is important to keep working to persuade the authorities by finding reasonable alternatives, even when a proposal is not accepted the first time. We will continue to proactively improve unreasonable regulations that constrain business activities.”

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