July 2nd, 2010

BONG KYU PARK, President

Korea Industrial Complex Corp.

I. Industrial Complexes in Korea

II. New Paradigm of Managing Industrial Complexes

III. Policies for the Future

1. Industrial Cluster Policy

2. Eco-Industrial Park Policy

3. Restructuring Policy

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Ⅰ

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Current Status

(AS of 2009)

Ⅰ. Industtrial Complexes in Korea

1

18 %

53,803

Total 815 complexes, 1,350 ㎢

62 %

$ 699 billion

72 %

$ 280 billion

43 %

1,474,410 persons

Production Export Employment Number of business

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1960s’Petrochemicals,

Textiles, Sewing

Ulsan, Guro

1970s’Steel, Machinery, Electronics

Changwon, Pohang, Gumi

1980s’

Materials & Parts

Banwoel Si-hwa,

Namdong

1990s’Machines, Transportation Equip-

ment

Gunsan,Daebul, Asan

2000s’Software, R&D

Jeju, Daedeok

Industrial Complexes in Korean Economy2Ⅰ. Industtrial Complexes in Korea

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Challenge to Industrial Complexes3Ⅰ. Industtrial Complexes in Korea

Deficient R&Dcapacity

Old and outdatedinfrastructure

Environment pollution& Emission of carbon

Industrial ClusterIndustrialComplexes

Faced with sloweconomic growth

Become degraded to unfavorable space

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II

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Ⅱ. New Paradigm of Managing Industrial Complexes

New Role of Industrial Complexes

The advent of the age of knowledge-based economy

Paradigm shift of managingindustrial complexes

Future

industrial

complex

Creativ

e

Eco-

friendly

Innova-

tive

1

Conventional indus-trial complex model

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Basic Management

Simple Aggregation of manufacturing functions

Administrative service

Advanced Management

Network + Innovation + EntrepreneurshipKnowledge based and multilateral service

Indus-

trial

Cluster

Restructuring

Paradigm Shift of Managing Industrial Com-plexes

Controlpollutants

Maintain facilities

2

Ⅱ. New Paradigm of Managing Industrial Complexes

Focus on industrial

land supply

Lead green

growth

Regenerate and

transformto creative

space

Link among industry -academia- research

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Eco IndustrialPark

III

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Simple manufacturing industrial parks ⇒ creative and in-novative industrial clusters through industry-academia-re-search networking

Deficient R&D capacity

Weak linkage among industry - academia-research

Insufficient knowledge-based service industry

Implementation

of the industrial

cluster policy

Innovative Policy : Industrial ClusterⅢ. Policies for the Future

1

Background

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Innovative Policy : Industrial ClusterⅢ. Policies for the Future

1

Overview

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Project Progress

Add 5 industrial complexes(November 2007)

Enlarge industrial clusters based complexes according to pan-regional eco-nomic zone policy (April 2010)

Designation of 7 industrial complexes as strategic clusters(April 2005)

Key Factor : Mini cluster – An innovative group

An integrated group joined by companies, universities and research in-stitutes to enhance their innovative capacity based on the specialized industrial sectors

Pan-regional cluster project is introduced to spread policy achieve-ments

1Ⅲ. Policies for the Future

Future Direction

Innovative Policy : Industrial Cluster

Spoke complex

Hub complex

Gumi

Busan

Bupyeong,JuanEast Sea,Bukpyuong

Banwoel Sihwa

Chungiu

Ochang,CheonjuCheonan,Asan

Namdong

Gunsan

Kwangju

Daebul

Changwon

Gyeongsan

Seoul digital

Jeju

Sacheon

Woolsan

SungseoIksan

Wonju

Yangsan

Woniu

Namdong

Banwoel Sihwa

Ochang

Gumi

Woolsan

Changwon

Daebul

Kwangju

Gunsan

Sungseo

Noksan

MachineParts

E-informa-tion

Mechatron-ics

Shipbuild-ing

Machines

Parts &Materials

MedicalEquipment

Eletronics

Auto

Machines

Optoelectron-ics

industry

Auto andMachinery

Model Project (2005)

Additional Project (2008)

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1 . Environmental pollution - Agglomeration of companies - Massive use of fossil fuel

2. Unstable energy prices

3. Reinforce environme- ntal regulations- 『 Convention on climate exchange 』

Environmental damage to local communities/Conflicts with communities Lack of environmental treatment facilities

Low carbon, green growth pole - Reuse of wastes, by-products - Resource recycling system- Efficient energy use - Reduction of pollutants

2

Ⅲ. Policies for the Future

Eco-Friendly Policy : Eco-Industrial Park

Background

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Product

Raw Mate-rial

Energy

Reduced Input

Energy

2Ⅲ. Policies for the Future

Eco-Friendly Policy : Eco-Industrial Park

Overview

Conventional Industial Complex Eco-Industial Park

Waste disposalMinimum waste &

Reduced emission CO2

FactoryFactory

FactoryFactory

Factory

Factory

Designed for economic benefit Focused on raw material, product Caused pollution & conflict

Economic benefit & environmental concern Raw material, products, by-product, waste Harmonized with environment and society

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Insufficient R&D infrastructure - R&D center, marketing & research and business support facilities

Lack of infrastructure- Lack of road, parking lot, green space, and amenities- Increasing logistics cost

Old-fashioned industries of structure- Low productivity in industrial factories

The old industrial parks : lack of regeneration ability - 15% of the entire industrial complexes are over 20 years old

3Ⅲ. Policies for the Future

Creative Policy : Restructuring of Industrial ComplexesBackground

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Project outline : Expansion of supporting facilities and infra-structureTransform to high value-added industrial structure

- Construct high-tech knowledge center- Promote clustering & network-ing

Expand corporate support-ing facilities

- Business support facilities

Renovate infrastructure

- Road, parking lot and green space

Provide more cultural & welfare facili-ties

- Culture, health and housing facilities

Ⅲ. Policies for the Future

Overview

Creation of industrial park

growth

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3 Creative Policy : Restructuring of Industrial Complexes

Ⅲ. Policies for the Future

Future Direction

1. Pilot project (2010~2012) - Expansion of support facilities and infrastructure in 4 pilot complexes - Primary investment by KICOX in addition to private financing, support from central and local governments 2. Main project (2013~2019) - Expand the restructuring of industrial complex project

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3 Creative Policy : Restructuring of Industrial Complexes

Thank You !