Your wise and profitable choice

Korea - Home to an able and dedicated people who have successfully weathered five thousand years of history, a place where passion and technology have merged to create an IT miracle. One of the world’s top 15 largest economies (2008), now also an environmentally-aware society, is leading the way in sustainable development. Korea always offers opportunities. Your success story starts here.

KOREA at a glance
Country Profile (2008)
Official Name Capital Area Population Language Illiteracy Religion Climate Time Political System Economy Currency Competitive Industries Republic of Korea Seoul 100,032km2 (as of end-2007) 48.6 million Korean (official) / English widely used 0% (between 20-40) Buddhism 24%, Protestant 23%, Catholic 8%, Other 0.8%, None 44.2% (Korea National Statistical Office, 2005) Continental with four seasons 9 hours + GMT Democratic republic, presidential system 15th largest economy (based on GDP), OECD member South Korean won (KRW, ₩) IT, Electronics, Semiconductor, Automobiles, Shipbuilding, Steel, Petrochemical

Key Economic Indicators
2003 National GDP (US$ billion) Real GDP Growth (%) GNI per capita (US$) Exports (US$ billion) Imports (US$ billion) Current Account (US$ billion) Unemployment Rate (%) CPI Inflation (%) Treasury Bond Yield (3 year, %) ForeignExchangeReserves(US$billion) Exchange Rates won/US$ won/yen100 won/euro 608 2.8 13,460 194 179 12 3.6 3.5 4.6 155 1,192 1,030 1,348 2004 681 4.6 15,082 254 224 28 3.7 3.6 4.1 199 1,145 1,059 1,423 2005 791 4.0 17,531 284 261 15 3.7 2.8 4.3 210 1,024 931 1,274 2006 887 5.2 19,722 325 309 5 3.5 2.2 4.8 239 956 821 1,199 2007 1,050 5.1 21,695 371 357 6 3.2 2.5 5.2 262 929 790 1,273 2008 928 2.2 19,231 422 435 -6 3.2 4.7 5.3 201 1,103 1,077 1,607

Source: Bank of Korea, Korea Customs Service

INVESTMENT ENVIRONMENT & BUSINESS OPPORTUNITIES
C o n t e n t s
03

Overview of FDI in Korea Investment Environment Government Policy and Incentives Market Human Resources Infrastructure Living Environment Business Opportunities Automotive Industry Semiconductor Industry Display Industry IT Industry Bio Industry Environmental Industry Photovoltaic Power Generation Logistics Industry Real Estate Development Invest KOREA Invest KOREA’s Global Network

06 08 10 12 14

16 18 20 22 24 26 28 31 33 35 36

02 03

OVERVIEW OF FDI IN KOREA
Trends from the 1997 Asian Financial Crisis to 2008
Starting from 1998, one year following the onset of the Asian Financial Crisis, Korea adopted a more liberal economic policy which included opening its capital and real estate markets to foreign investors. The Foreign Investment Promotion Act, passed in 1998, enabled the government to launch a more aggressive campaign to attract foreign direct investment (FDI). The government’s efforts to accelerate Korea’s recovery from the crisis by inducing foreign capital paid off handsomely, although that recovery was partly attributable to the buoyancy of the global economy. However, the September 11, 2001 attacks in the United States and the burst of the Internet bubble in the same year reduced global liquidity and subsequently started a downward trend in inward FDI into Korea. After a period of trial and error, the government finalized its comprehensive plan for foreign investment attraction in 2003, and after FDI inflows into Korea saw a strong resurgence in 2004, the inbound FDI amount in terms of notifications averaged over US$10 billion for five consecutive years until 2008. Given that Korea’s total inbound FDI from 1998 to 2008 is 5 times that of 1962 to 1997, foreign direct investment has now become one of the major economic pillars driving the Korean economy. In addition, as FDI to Korea expands into high-value added areas such as R&D and logistics centers, its economic impact is getting larger. Thus, the volume of annual FDI has stabilized at the level of US$11billion, while the quality of FDI has also improved with a substantial amount coming from greenfield investment, accounting for 61.7 percent of total inbound FDI in 2006, 76.4% in 2007, and 62.2% in 2008. However, considering the large potential for M&A-type investment in line with current global trends, the need for an institutional framework that can facilitate M&As is growing. Meanwhile, the current administration which entered office in February 2008 has been putting into high gear preparation for a more powerful and concrete system for FDI promotion. Despite the deterioration of the global investment climate including the recent worldwide financial crisis, activities to attract foreign investment have increased due in part to business-friendly policies in Korea. As a result, Korea witnessed an upward turnaround in FDI in 2008 for the first time in four years, reaching the highest level since 2000 both in terms of volume and the number of notified investments. The decline in investment from the United States due to the financial crisis was offset by an increase in investment from the EU and Japan. Furthermore, investments in the sectors of finance and insurance have been significantly on the rise, growing as a provision of the 'Financial Investment Services and Capital Markets Act’ that came into effect on February 4, 2009, as well as with the augmented investment activities of institutional investors seeking more liquidity. Based on growing confidence in the development potential of Korean industry, investment in manufacturing is also steadily on the rise.

Foreign direct investment trends in Korea (Unit: US$ billion)
Notification Basis | A total of US$124 billion from 1998 to 2008

FDI from January to July 2009 jumped by 32.4 percent year on year to USD6.8 bil., posting a record high since 2000.

15.5 15.2 12.8 11.3 8.9 9.1 6.5 6.8 11.6 11.2 10.5 11.7

Jan/July

Source: Ministry of Knowledge Economy

OVERVIEW OF FDI IN KOREA
Undeterred by unfavorable investment conditions created by the global economic downturn, it is expected that hard times will end in the near future as Korea implements recovery efforts in various directions. Those include promoting the market for mergers and acquisitions, taking full advantage of opportunities created by the promulgation of the Financial Investment Services and Capital Markets Act, and strengthening activities to attract investment not only from major economic blocs such as the United States and the EU, but also from those less affected by the financial crisis including the Middle East and China. service sector grew by 10.2 percent year-onyear marking US$8.39 billion with the influx of investment concentrated in the financial and insurance sectors. Although it saw a decline in 2006, investment in services has continued its upward trend since 2007. In the meantime, investment in foodstuffs, nonmetallic minerals and chemicals increased in the manufacturing sector in 2008. Investment in parts and materials accounted for 84.5 percent of manufacturing investment, totaling US$2.54 billion.

Status of inbound FDI by region
As of 2008, foreign direct investment from the EU, the U.S., and Japan accounted for 77.6 percent of total inbound investment in Korea, with the EU accounting for 54.1 percent of the total, or US$6.3 billion. The European Union stood collectively as the largest direct investor in Korea representing 46.5 percent and 43.9 percent of the total in 2006 and 2007, respectively. Major European investor nations in Korea are the United Kingdom, the

Status of inbound FDI by industry
In 2008, investment in the manufacturing sector accounted for 25.6 percent of overall inbound FDI notifications into Korea, while service sector investment totaled 71.9 percent and other business categories, the remaining 2.7 percent. The distribution of investment in the industrial sector is similar to that of 2007. However, investment in the

Inbound FDI by industry
(Unit: US$ billion)
0.01 3.9 0.9 0.6 0.5 1 3.1

(Unit: US$ million)

2.3

0.9

2.4

0.4 0.8

1.1

2.9

3

1.8

1

1.1

0.8

0.7

2.8

3.9

1

1.2 0.3 0.3

1

3.9

Finance and Insurance Distribution and Logistics Chemicals

Electrical and Electronics Restaurants and Hotels Business Services

Source: Ministry of Knowledge Economy Other

Trend in the number of foreign-invested companies in Korea since the Asian Financial Crisis
17,054 13,034 8,135 4,880 2,274

04 05

Netherlands, Germany and France. Meanwhile, in the first quarter of 2009, investment from Japan jumped by 162 percent compared to the same period last year at US$661 million. Japan's share in total inward FDI grew markedly by 9.3 percent on the year to 39.4 percent in total, driven by a surge in investment in manufacturing, especially in parts and materials. Investment from Japan fell by 53% in 2007, but rebounded significantly by 44 percent in 2008. The high yen and the fall of Korean real estate prices steered the increase in investment from the Japanese financial sector in the first half of 2009, and Korea's strategic efforts to attract investment using the high yen and other incentives led to a sharp increase in FDI from Japan, to the tune of 82.6 percent. Foreign direct investment notifications from the United States totaled US$1.7 billion in 2006, a 37-percent year-on-year decrease. In 2007, FDI from the U.S. jumped by 37% to US$2.3 billion, although the negative effects

of the financial crisis hit the United States the hardest, thus having a profound effect on the country’s outbound investment. The dramatic drop started from the third quarter and the volume of FDI from the U.S. recorded a mere US$1.3 billion, including a 52.3-percent decline in U.S. investment in the Korean service sector.

Status of inbound FDI by type
By type, greenfield foreign direct investment grew significantly between 2004 and 2006, while M&A-type investment waned. However, the upward trend in greenfield investment until 2007 was halted in 2008, showing a 9.4percent decrease from the year before. Meanwhile, M&A-type investment which had been on the decline since 2004 amounted to US$4.43 billion in 2008, a 78.2-percent yearon-year increase, accounting for 37.8 of Korea’s total inbound FDI.

Inbound FDI by region
5.4 1.2 1.1 2.3

(Unit: US$ billion)
Japan 14.7% Netherlands 11.3%

(1962~2008, %)

Germany 5.6%

4.4

0.9

2.2

2.8 U.S.A. 27.0%

UK 5.0% France 3.8%

5

2.1

1.7

2.4 Others 32.6%

4.8

1.9

2.7

2.2

E.U.

Japan

U.S.A.

Rest of the World

Source: Ministry of Knowledge Economy

Inbound FDI by type
(Unit: US$ billion)
7.3 4.4

(Unit: US$ million)

8

2.5

6.9

4.3

6.3

5.3

Greenfield

M&A Source: Ministry of Knowledge Economy

GOVERNMENT POLICY AND INCENTIVES
Policy direction for inbound FDI
After the foreign exchange crisis in 1997, the Foreign Investment Promotion Act was enacted into law in 2008. Supported by active market liberalization as well as a system to encourage foreign direct investment, inbound FDI into Korea saw a rapid increase in the following decade, becoming an important pillar of the Korean economy. In 2009, with the paradigm shift in the global industry including an increased focus on green growth, and in preparation for a global economic recovery, the Korean government has established a plan to expand inbound FDI into Korea as follows. First, among all industrial sectors, areas with a focus on green growth were selected and 17 new industrial growth engines have been given full government support, substantially raising the competitiveness of Korea as an attractive destination for FDI. Furthermore, the Prime Minister has been named the Chairman of the Foreign Investment Committee, and an accountability system placing responsibility on Korea’s ministries and foreign investment-related agencies was adopted so as to focus the full capacity of the government on FDI attraction. A highlevel team has been organized to improve the investment environment for foreign capital in order to address issues that deterred investment on the spot. Furthermore, in order to facilitate investment into Korea’s Free Economic Zones at an earlier point, the government has eased regulations on development procedures, provided assistance for early construction of infrastructure, and allowed early development of available land on a large-scale basis, as well as increasing the acceptable proportion of students of Korean nationality in foreign educational institutions.

Incentives for foreign companies investing in Korea
The purpose of offering FDI incentives is to compensate foreign companies which decide to invest in Korea for their economic contributions and to assist them with costs related to establishing new business operations in the country. The government currently offers tax relief to foreign companies with the potential to make major contributions to the Korean economy, provides them with industrial sites or assists them with site location and acquisition, and provides cash grants and other types of financial support. Cash grants have been available from 2009 for foreign investment in high-tech industries and in sectors that are likely to create new jobs. Land within Foreign Investment Zones designated to the parts and material industries can be rented with a higher level of discount. Financial support for the construction and extension of international schools are available in the acquisition of sites and construction costs according to ordinances set by local governments.

⇢ Tax relief
Industrial support services and businesses deemed as “high-tech” by the Ministry of Strategy and Finance or foreign investors who have contributed in excess of a minimum level within Foreign Investment Zones or Free Economic Zones for businesses includ-

| Supply of industrial sites | (as of June 2009)
Individual-type Foreign Investment Zones (FIZ, 33 zones) When foreign companies invest more than a predetermined amount by industry (manufacturing:
US$30m; tourism: US$20m; logistics: US$10m; and R&D: US$2m), the foreign company in point becomes eligible for a variety of government subsidies. Those include a 7-year period of tax relief (5-year full exemption, 2-year 50 percent reduction), rent-free real estate, and a 3-year full exemption of tariff on capital goods through the acquisition of land by the government as state or common property for the operation of the foreign company in advance.

Complex-type Foreign Investment Zones (FIZ, 13 zones) Certain areas within an industrial complex designated as Foreign Investment Zones are
transformed into state or common property. The land is then leased to foreign companies where 30 percent or more of its shares are held by foreign nationals. When more than a minimum level of investment is made by industry type (manufacturing: US$10m; logistics: US$5m), a 5-year tax break (3-year full exemption, 2-year 50 percent reduction) becomes available, as well as a redemption of tariff on capital goods for 3 years and land with an affordable rent at less than 1 percent of its market value for 50 years for the tenant.

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ing manufacturing, logistics, R&D, and hotel/leisure are given tax relief including a 5or 7-year reduction on corporate, income, and local taxes, as well as on dividends received. If a business that has been acknowledged to receive tax relief acquires capital goods, imports that have completed declaration within 3 years after the investment was registered will be subject to a lower tariff. The ex-ante verification system for tax relief, which checks whether a business falls into the category of the industrial support service sector and high-tech industry, is currently in operation in order to assist investors in making their decision to invest earlier on. Apart from the tax incentives available to foreign investors, various tax benefits are provided including tax credit for investment and tax relief for small and medium enterprises (SMEs).

Laboratories for R&D and construction or expansion projects for nonprofit R&D corporations are also eligible for the grant program. Foreign investment regarding the establishment of the regional headquarters of a multinational corporation or a business pertaining to a regionally strategic industry with the potential to make a significant contribution to the local economy may be considered for such a grant, even if the total amount of investment is less than the minimum set under this program. In order to strengthen Korean policies in favor of foreign investors, the government will concentrate its cash grants on major focal areas that come under the categories of green growth and new growth engines, shifting from a more dispersed approach in the past where grants were provided for industrial support service sectors and high-tech industries. Such cash grants will be available according to an evaluation of the expected economic ripple effect, regardless of the size of the investment. Grant limits shall be increased in a flexible manner (the 13th meeting of the Presidential Council on National Competitiveness, May 27, 2009).

gories of such zones (see below).

⇢ Financial support
Financial support refers to financial aid which is applied toward the cost of staff education and training, the cost of hiring staff, and projects to build infrastructure within a foreign investment zone, or to enhance the living environment within it. Aid under this program is currently extended to companies in which the foreign equity stake is at least 30 percent or in which a foreign company or individual investor is the largest shareholder.

⇢ Other incentives
Invest KOREA has been holding the Job Fair for Foreign-Invested Companies in Korea, for the past four years. Through this initiative, Invest KOREA aids in resolving the recruiting efforts of foreign companies while promoting promising job opportunities to Korean job seekers, thus raising the public awareness of foreign investors’ contribution to the national economy. The team incharge in Investment Korea is ‘Investment Aftercare Team’ (jobfair@kotra.or.kr / Tel. 82-2-3460-7647/7655)
Ministry of Knowledge Economy

⇢ Cash grants
Under the cash grant program which is aimed at attracting foreign investment with potentially high economic effects, eligible companies receive from the government a grant corresponding to 5 percent or more of their total investment in Korea. The exact amount of the cash grant is determined through negotiations between the investor and the government. To be eligible for cash grants, a foreign company must invest at least US$10 million in a Korea-based firm engaged in an industry support service or high-tech business, or in a greenfield investment project in parts and materials manufacturing. The percentage of foreign equity, furthermore, must be no less than 30 percent.

⇢ Supply of industrial sites
The Korean government makes available industrial sites within specially-designated zones to all foreign-invested firms meeting a certain minimum set of requirements. Land within these zones is provided either free of charge or at low cost. Individual-type foreign investment zones, complex-type foreign investment zones, free trade zones and free economic zones make up the four main cate-

www.mke.go.kr
Ministry of Strategy and Finance

www.mosf.go.kr
Free Economic Zone Planning Office

www.fez.go.kr

Free Trade Zones (FTZ, 14 zones) Free Trade Zones refer to areas where manufacturing, logistics, distribution, and trade activities are carried out with tariff
benefits. In general, airports, harbors, and their adjacent areas, as well as distribution and cargo terminals, are designated as Free Trade Zones. Many benefits are provided including affordable lease, a 5-year tax break, and customs deferral.

Free Economic Zones (FEZs, 6 zones) In 2003, Incheon, Busan-Jinhae, and Gwangyang were designated as Free Economic Zones with Yellow Sea,
Saemangeum, as well as Daegu-Gyeongbuk joining the list in 2008. Free Economic Zones are areas that are larger than lower level local governments, and given authority for autonomy by the local government. Aside from the business activities of foreign companies, a variety of exceptional and distinct benefits are offered within Korea’s FEZs including those related to education and medical services, the residential environment, administrative support, as well as discounts for tax, tariffs, and rent.

MARKET
A vast domestic market with sophisticated consumers driving demand
Home to a population of 48.6 million and ranked 15th globally in terms of GDP (2008), Korea offers an attractive marketplace for businesses from around the world. Along with its large, fast-growing economy (average annual GDP growth of 5 percent*), the country’s broad segment of sophisticated consumers with high buying power is another decisive factor in favor of Korea for companies looking for an overseas business base. Nearly half of the Global Fortune 500 firms (245 as of 2008) have established a business presence in Korea. Korean consumers, constantly demanding more advanced technologies and the latest in retail goods, are very familiar with the products manufactured by the world’s leading corporations, a reality which has consequently led to a sharp expansion in Korea’s domestic market. As a matter of fact, Korean manufacturers of the mobile phones and consumer electronics that are currently so highly valued worldwide as top quality products owe much to the discerning and difficult-to-please consumers who continuously push the industry to raise the bar. This also explains just one of the reasons why consumer goods companies like P&G and L’Oreal, and tech firms like Microsoft, Motorola, eBay, Olympus and Siemens, are using Korea as a test market for their new products.

*Economic Growth Rate (%)
7.2 5.2 4.6 5.1

A big trading nation
As of 2008, Korea was the world’s 11th largest trading country with exports of US$422 billion and imports of US$435 billion, which amounted to 45 percent and 47 percent of the country’s GDP, respectively, and over 90 percent when combined. Korea’s exports ranked 9th, with approximately US$165.4 billion in

4.0 2.8 2.2

Source: Bank of Korea

Shinsegae Department Store’s flagship branch in downtown Seoul

2008 Export Partners
Japan 7% Rest of Asia 18%

2008 Import Partners
Rest of Asia 14% Japan 14%

EU 18% China 22% China 18%

Middle East 23%

U.S.A. 11% Other 18% Middle East 6% Other 10%

U.S.A. 9% EU 12%

Source: Korea International Trade Association

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accumulated exports during the first half of 2009. With China, the United States and Japan as her major trading partners, Korea trades with almost every country around the globe. Korea’s trade with its Asian neighbors is particularly active, representing over half of the country’s total trade volume. Korea’s top five exported goods are ships, semiconductors, displays, automobiles, wireless communications equipment, while crude oil, semiconductors, natural gas, naphtha and soft coal make up the major imports (Aug. 2009, Korea International Trade Association).

ness activities will be eliminated, thereby further enhancing the openness and competitiveness of the Korean market and making it even more attractive to global business.

Dynamic and competitive market players
The competitiveness of Korea-based firms on the global scene ranks high in terms of Korea’s attractiveness to international business. Korean companies have achieved the top global market share in shipbuilding, DRAM semiconductors and TFT-LCD displays, and count themselves among the top five in automobiles, steel, petrochemicals, textiles and consumer electronics. Fourteen Korean firms made the 2007 Fortune Magazine Global 500: Samsung Electronics, LG, Hyundai-Kia Motor, SK, Samsung Life Insurance, POSCO, Korea Electric Power Corporation, Kookmin Bank, Hanwha, KT, Samsung, Hyundai Heavy Industries, SK Networks, and S-Oil. The presence of globally competitive firms certainly has a powerful influence on the prospect of a company investing in Korea. Industrial Complex Zones - home to major Korean corporations - are tremendous sources of competition and cooperation and make it easy to create strong forward and backward linkages. Joint ventures between Samsung and SONY and LG and Philips are two representative instances of productive industrial partnerships which have emerged from the LCD sector, while the takeover of Daewoo Motors by General Motors and that of Samsung Motors by Renault can be considered success stories in the automotive sector.

Gateway to Northeast Asia
Strategically poised between China and Japan - two of the world’s largest markets Korea is located within an average air travel time of three hours from nearly 60 cities with a population of 1 million or more. Meanwhile, the conclusion and signing of the Korea-US FTA in April and June 2008, respectively, has set the stage for further improvements in access by Korea-based businesses to the world’s largest consumer market. In June 2009, the Korea-ASEAN FTA covering all sectors was signed and in August 2009, Korea and India signed a Comprehensive Economic Partnership Agreement. Free trade agreement negotiations with the EU were also concluded in July 2009, and FTA talks are currently under way with other major economies including Canada, Mexico, the GCC, Australia, New Zealand, and Peru, and are due to begin with China, Japan, MERCOSUR, Turkey, and Russia in the near future. Once these FTA negotiations arrive at a successful outcome, any remaining regulatory obstacles to busi-

“Korea’s advanced electronics and automotive industries provide 3M with a solid customer base. Our strategy at 3M is to be as near as possible to the customers we serve, and Korea precisely occupies a very strategic location within Northeast Asia.”
Michael F. Roman, former CEO, 3M Korea

HUMAN RESOURCES
High educational zeal and achievement
Koreans have earned a global reputation for their educational fervor. The strong commitment to learning has often been cited as the secret behind Korea’s surprising overnight transformation into the world’s 11th largest trading nation. According to the IMD World Competitiveness Yearbook 2009, the percentage of the Korean population aged 25-34 that has attained at least tertiary education is as high as 56 percent. This is above the corresponding figures for most OECD nations, excluding Singapore, which tend to hover in the 40 percent or lower range, effectively testifying to the never-ending desire for higher education among Koreans. The widespread pursuit to attain higher education has resulted in active early education in Korea, thus explaining the high scholastic achievement of Korean students even in primary school. According to a 2006 survey by the OECD Programme for International Student Assessment (PISA), which assessed math performances of 15-year old students in OECD member countries, Korean students showed much higher levels of performance than the OECD average, along with their peers in the Netherlands. Koreans’ educational fervor is well reflected in their spending on education. Results found in the 2008 report by Statistics Korea, a government statistics body, said 13.8 percent of average Korean household budgets was devoted to education. Koreans’ zeal for learning has also driven up the number of students leaving Korea for overseas educational institutions. From 2001 to 2005, the number of students in primary and secondary school who left Korea to study abroad increased at an annual rate of 27 percent. Official reports from 2007 released in China and the U.S. indicated that, out of the total number of international students in the two countries, Koreans accounted for 36 percent and 20 percent, respectively, coming in at the top of both rankings. The increasing trend toward the pursuit of education in overseas institutions is expected to have a beneficial longterm effect, as it expands the pool of Korean human resources with global training while simultaneously stimulating the domestic educational system. Investment in learning continues in Korea beyond the school years. Many working adults are avid students, known nowadays under the newly-coined term “saladent,” a juxtaposition of the words “salaried worker” and “student”. A survey conducted by a private sector job information agency found that 70 percent of all working adults in Korea were enrolled in some form of study for their own self-development.

Robocon Korea 2007, an annual robot-making contest sponsored by Korean Broadcasting System (KBS)

Efficiency in work
Industriousness is a feature nearly as distinctively Korean as educational fervor. Korea is among the top OECD economies in labor productivity. According to the Dec. 2007 edition of the OECD Productivity Database, the growth in GDP per hour worked in Korea during the period 2001-2006 ranked second only to the Slovak Republic. Additionally, Korea’s labor productivity growth recorded rose 4 percent

“Korea has excellent universities and outstanding research human resources emerge from those universities. R&D especially needs passion and I believe Koreans are the best in this respect.”
Josef Winter, former CEO, Siemens Korea

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and 5.4 percent in 2006 and 2007, respectively, much higher than the OECD average (1.6 and 1.4) and ranked in the top three (OECD Factbook 2009).

Growing female workforce participation
In the past, the presence of women in the workforce compared to that of their male counterparts was disproportionately low in Korea. This has changed of late, however, helped by related government policies. The Department of Education, Science and Technology reported in a recent study that for the last decade, about 50 percent of 4-year university graduates were women, and that the proportion of females attaining Master’s degrees had been on the rise after surpassing the 40-percent mark in 2006 (42% as of 2008). According to data released by Statistics Korea in July 2009, women outnumbered men in passing major state exams in Korea that select diplomats and senior-level government officials, representing 65.7 percent in the foreign service exam (up from 10 percent in 1992) and 51.2 percent in the civil service exam (up from 3.2 percent in 1992). Women also accounted for 38.0 percent of successful candidates in the rigorous state bar exam (up from 8.8 percent in 1995). Women also represented over 10 percent of high-ranking government officials (over class 5) as of 2008, and 36 percent of corporate CEOs, almost the levels as high as their counterparts in advanced countries. Female participation is fast expanding in the media, in academia, and in politics. As more initiatives are under way to remove any barriers that may hinder women’s progress to becoming leaders of Korean society, the role of women in Korea’s industrial workforce is likely to increase in the future.

Improving labor-management relations
Based on a common understanding of the crucial importance of labor-management harmony as part of Korea’s FDI environment, the country’s labor and management circles along with the government have come together to launch joint efforts toward more stable labor-management relations resulting in more cooperative workplaces across Korea. A growing number of the negotiations which take place between labor and management concerning wages and other types of collective bargaining are now being successfully concluded without strikes or other disruptions ensuing. Many companies have also begun issuing a “labor-management cooperation declaration,” a commitment between employers and employees, in order to pursue mutually beneficial relations. The number of such declarations has reached 2,689 as of the end of 2008, which is a dramatic increase of 278.5 percent, over the 749 declarations made the year before. Meanwhile, the Korea Federation of Labor Unions is actively joining efforts to make improvements in Korea’s labor-management environment better known to foreign investors, taking part, for instance, in investment promotion sessions both in the U.S. and Japan, an initiative which promises a brighter outlook for this sector.

Technological competitiveness
Korean rankings in patent related indices, as reported in the IMD World Competitiveness Yearbook 2009, were impressive to say the least. Korea ranked 1st globally in patent productivity as of 2007, which corresponds to the ratio of the number of patents granted to residents to R&D personnel in business. In terms of information technology skills, Korea came in third position after Iceland and Israel. The skill level of Korean workers is just as high in fields that are not scientific or IT-related. Korea’s globally top-ranked shipbuilding and electronics industry and the country’s fast-growing automotive industry are all skills-intensive manufacturing sectors. Notably, the stunning strides made in the Korean shipbuilding industry in recent years have been the result of bold facilities investment coupled with a highly-skilled labor force and an extended period free of labor disputes. To maximize the contribution of skilled technicians, Korean companies have recently introduced a peak wage system. Under this system, the wages of workers who are past a certain age are progressively reduced annually, in exchange for the guarantee of lifetime employment or an extension of the retirement age. Since introduced in 2006, the system has been continuously making industry-wide implications.

Information Technology Skills (2007)

Patents Granted to Residents (Average 2005-2007)

Based on a scale of ten Source: IMD World Competitiveness Yearbook 2009

Source: IMD World Competitiveness Yearbook 2009

INFRASTRUCTURE
Incheon International Airport, the transportation hub of Northeast Asia
Incheon International Airport, which first opened in 2001, handles 63 airlines which flew to 161 cities and 49 countries, and served a total of 30 million international passengers in 2008. In just 6 years, the airport has risen to the position of 2nd largest in the world in terms of air freight volume, processing 2.42 million tons of cargo in 2008. The airport was awarded the ‘World Best Airport’ in the assessment of Airport Service Quality by the Airports Council International for 4 consecutive years from 2005 to 2008. With the completion of its 2nd phase of construction in June 2008, Korea’s representative airport opened a 3rd 4,000-meter long runway that is capable of accommodating super-large aircraft like the Airbus 380. In addition, in order to meet growing demand for air travel and provide high quality services, the Korean government announced the basic plan for the 3rd phase of construction that will increase airport capacity, set to begin in June 2009. The design will be decided upon from late this year and will be completed in 2015. Upon completion, the airport will be able to handle 62 million passengers and 5.8 million tons of cargo per year, up from the current capacity of 44 million passengers and 4.5 million tons. The cargo terminal complex in the airport’s free trade zone, which opened for business in 2006, is used by global cargo and warehouse companies such as DHL, FedEx, TNT, UPS, Polar Air, Schenker, KWE and AMB Property. In 2007, Incheon International Airport newly developed the Sea and Air Inter-Modal Transportation System using the Road Feeder Service, with an aim to attract greater volumes of cargo from China, and thus accelerating its move towards becoming a logistics hub in Northeast Asia. The Incheon International Railroad was brought into service in March 2007, connecting the 40-kilometer long distance to Gimpo Airport. When the extension to Seoul Station is completed in 2010, passengers will be able to transfer to the KTX, Korea’s high-speed bullet train, which will serve to improve public access to major cities throughout the country. by catering to the shipping demands of China, Russia, Mongolia, Central Asia and Europe. As Busan New Port, situated 25 km away from Busan Airport and Gwangyang Port in the southeastern part of the Korean peninsula, evolves into a super-large container port complete with a fully automatic system, these two ports that have been designated as Free Trade Zones with a wide range of tax benefits for foreign companies, are being nurtured as a global logistics and business hub. Korea has a global network for marine transportation and ports, which include among others Incheon Port, Pyeongtaek・Dangjin Port and Ulsan Port, not to mention largescale logistics complexes. Foreign-invested companies which are taking advantage of the outstanding facilities include Steinweg, COSTCO and Sanyo Maritime in Busan Newport, Tesco and Mevius in Ulsan Port, and Stolt Haven, Vopak and Odfjell in Ulsan Port.

High-speed rail system and Trans-Korean Railway
With the completion of high-speed railroad construction between Seoul and Busan and Seoul and Gwangju in 2004, Korea has become the world’s 5th country with a highspeed railroad system, following Japan, France, Germany and Spain. The two-phase project for the Seoul-Busan and SeoulMokpo railroads, projected to be completed in 2010 and 2017, respectively, will improve east-west movement, thus reducing traveling time across the nation to just several hours. In addition, the intergovernmental agreement on the Trans-Asia Railway (TAR) Network

Strategically located ports and harbors
As of 2008, Busan Port located in Busan, Korea’s 2nd largest city, was the world’s 5th largest container port with an annual throughput of 13.45 million TEUs (twenty-foot equivalent unit). The Port is placed at the artery of the world’s major sea routes, linking Europe, Asia and North America. If the interKorean railroad is launched, the port is expected to serve as a global logistics center
Incheon International Airport

“Korea’s well-developed network infrastructure, advanced mobile technologies and excellent IT manpower make it one of AMD’s most strategic markets for development of innovative computing platforms.”
Hector de J. Ruiz, former Chairman and CEO, Advanced Micro Devices

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that links Asia and Europe was concluded in the 3rd UN EXCAP Ministerial Conference on Transport in November 2006, while in May of 2007, trial operations were conducted on some parts of the Gyeongui and Donghae (East Sea) lines that constitute the TransKorea Railway (TKR), part of the TAR Network. If the TKR is constructed, the line will be connected to the Trans-Siberia Railway (TSR), the Trans-China Railway (TCR), the TransManchuria Railway (TMR) and the TransMongolia Railway (TMR) which themselves are linked to the TAR. Through this plan, Korea will have an on-the-ground logistical network that reaches Asia and Europe, going beyond her existing network which is based on marine transportation and ports.

broadcasting and communications services, with features for convergence, realization, intellectualization and personalization. With the completion of these efforts, the realistic Rich Media service, featuring 4 to 16 times higher definition compared to full HDTV, will be rejuvenated thus creating a ubiquitous environment, which will enable both wired and wireless convergent services for voice calling, the Internet and broadcasting at any time anywhere. In terms of ICT technology, Korea has diverse new technologies among which are WiBro (Mobile WiMAX), WCDMA HSPA, T-DMB (terrestrial DMB), FTTH WDM-PON, Embedded SW Integrated Solutions, Digital Actors, and low-power SoC for interactive DMB and voice-recognizing navigation. In the same light that CDMA has brought an economic impact estimated at KRW 56 trillion to Korea, these technologies will be used as new driving forces for Korea’s ICT sector. In the meantime, according to the OECD, as of 2007, Korea ranked highest in terms of the trade balance of ICT goods, with a surplus of US$43.28 billion. As an aside, the Korean government has announced that the country’s ICT trade surplus increased to US$57.78 billion in 2008. Korean companies such as Samsung Electronics and LG Electronics are maintaining the lead in household appliances including memory semiconductors, LCD /LEDs, TVs and air conditioners and more recently are looking to grab top position in the mobile phone market. In contrast to Korea’s large enterprises, Korean SMEs are taking

charge of the global ICT market in various sectors including online games, computer parts, network-based intelligent robots, body composition analyzers and electronic door locks. Korea’s competitive edge which has been traditionally based on manufacturing has now extended into the IT sector through the country’s determination to develop advanced technologies, and now synergy effects are being seen.

World-class R&D centers
Korea’s state-of-the-art IT infrastructure, competitive IT firms and technology, and innovation-friendly consumers constitute a winning combination that has attracted global IT giants to her soil. Microsoft has opened its R&D lab for mobile technology in Korea; IBM, an R&D lab for ubiquitous computing; and Google, an engineering lab. Meanwhile, Motorola, Microsoft and Intel have chosen Korea as the test market in which to first release their new products in light of the nation’s technology-savvy and trend-conscious consumers whose feedback is highly prized. Motorola and eBay have selected Korea as their Asia-Pacific headquarters from which to oversee their business interests in countries like China and India. Kimberly-Clark opened its first R&D center outside the United States in Korea while Siemens and Dupont also operate a medical R&D center and a nano R&D lab, respectively, within Korea. L’Institut Pasteur, an eminent French biotechnology institute, has also had a research presence in Korea since 2004.

IT wonderland
In the Digital Opportunity Index (DOI) released by the International Telecommunications Union (ITU), Korea has ranked first in the world from 2005 to 2007 (as of the time when the index was released). The DOI is an index that comprehensively measures Internet penetration rates, price relative to average income, and Internet usage rates to show countries’ ICT performance. After focusing on establishing and advancing the country’s ICT infrastructure like xDSL and Broadband from 1995, Korea has gained a foothold as one of the world’s Internet superpowers. At the present time, Korea is striving to establish the Ultra Broadband Convergence Network (uBcN), required for the future

Digital Opportunity – Top 5 Economies (2007)

Number of Broadband Subscribers per 1000 Inhabitants (2007) – Asia Pacific countries

Source: International Telecommunication Union

Notes: Korea ranks 7 th globally. Source: IMD World Competitiveness Yearbook 2009

LIVING ENVIRONMENT
receiving praise not just at home but from around the world. The stream is gaining a reputation as a nice place for refreshment for entrepreneurs and investors, going beyond just a tourist attraction. The capital city’s two main squares – near Seoul City Hall and Gwanghwamun – have brought a sense of comfort to the urban landscape. The vivid greens of Seoul Forest, the rejuvenated Namsan and clean streams that stretch throughout the city have led to the creation of a massive jogging course, connecting Seoul with the city’s periphery. In a nutshell, Seoul is a place where citizens can go hiking near their home, enjoy the colorful night scenery of the Han River and stroll around without concern for their safety at night.
The 5.5 km-long Yangjae Stream traverses the upscale residential area of Dogok-dong, Seoul

capital, a nationwide rail network that connects the country’s urban areas will be built, further solidifying Seoul’s public transit infrastructure. In 2003, a UN assessment reported that Seoul ranked highest among the world’s top 100 cities in terms of the e-government system which allows the citizens to file complaints, pay taxes, or make a reservation for public services on the city’s Web site. In light of this accomplishment, Seoul has since been able to export its know-how to Hanoi, Vietnam in September 2005 following a previous overseas project, ‘e-Moscow’ for Moscow in 2004. Other countries in Eastern Europe, Southeast Asia and South America are also showing interest in Seoul’s e-government system. The Seoul Arts Center, a mecca for art, provides world-class performances and exhibitions from classical music, jazz, gukak (Korean traditional music), paintings, operas and musicals along with outdoor water shows.

Seoul, the green digital capital
A megalopolis home to over 10 million residents, Seoul is a dynamic modern city situated within a majestic river plain. Harmoniously marrying modernity with tradition, technology with art, Seoul is a vibrant city that has succeeded in transforming and reinventing itself. In recent years, Seoul has been rapidly shedding the concrete facade acquired during decades of industrialization, and is now spangled with an increasing number of green spaces. The Cheonggyecheon (or Cheonggye Stream) whose refurbishment was completed in December of 2005 won ‘The Best Public Administration’ prize at the 9th International Architecture Biennale in Venice, Italy, in 2004,

Seoul’s transportation system that connects nearly all sections of the large city was awarded the ‘Certificate of Recognition’ by the International Association of Public Transport for the city’s successful policy. The officials from the House of Commons Committee on Transport in the United Kingdom, as well as the Ministries of Transportation of Vietnam, Beijing and Istanbul have visited Seoul to observe the capital’s public transit system and some have signed an MOU to expand cooperation in transportation. In May 2005, Seoul was awarded the Metropolis Award for its innovative theme project in Berlin. Another achievement that Seoul is proud of is its humans-centered transportation innovation that is now being benchmarked by other large cities across the globe. In addition to its current subway system with nine lines which are linked to every nook and corner of the

24/7 non-stop services
Korean cities bustle with activity at all hours with most essential services available around-the-clock. In addition to uninterrupted ATM access and online banking, computer game arcades, dry saunas (jjimjilbang), discount chain stores and restaurants are open day and night. Doctors receive patients after hours as well, and an increasing number of private clinics accept patients even during the weekend. TV home shopping channels and online stores generally offer interest-free installment payment plans as well as free

“Cheonggyecheon, with its smartly placed nooks, rocks and rock bridges, and walkways where people relaxed, cooled off and played, began to resemble a river environment. Artwork pops up for festivals in and around Cheonggyecheon on holidays, it became a major venue for viewing World Cup, and I hear soon there will even be fashion shows on Cheonggyecheon.”
Mr. Nicholas Yukio Tomizawa, VP, Gale International Korea, and the 1st prize winner in the ‘Life in Korea’ Essay Contest sponsored by KOTRA

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delivery taking no more than a couple of days on purchases meeting a few basic conditions.

Speedy and friendly customer-oriented services
In Korea, should a home appliance start acting up, one can count on the retailer or manufacturer to dispatch a technician for onsite repair - at no or minimal cost - within two business days. All department stores offer parking staff to assist customers, with some going so far as to provide valet parking service. Road assistance from auto insurance companies is generally very prompt with an agent showing up within 30 minutes or less. Service in most restaurants tends toward excellent, and tipping is a custom which has yet to take a strong foothold in Korea. Largeitem retail stores offer free home delivery and set-up services. Indeed, the pervasiveness of service-mindedness in Korean business is a constant source of admiration, convenience and delight for many international visitors and residents in Korea.

gration work in five languages including English, Chinese, Japanese, Vietnamese and Mongolian, but also offers a one-stop public service that handles communications in other languages like Tagalog, Russian, French and Spanish via telephone call through a visit, by email or through its Web site. Aside from the Seoul Global Center, there are 5 additional global village centers in areas where foreign nationals are concentrated, which maintain a close relationship with the expat community to provide public services and resolve any difficulties they may face. In addition to the process of obtaining an entry visa for Korea being dramatically simplified in recent years, the list of international schools for children of foreign residents in Korea has been steadily expanding as well. Currently there are a total of 50 international schools in Korea including 20 in Seoul, 8 in Gyeonggi Province and 5 in Busan. The quality of Korean health care is among the world’s best, especially in the fields of ophthalmology, dermatology and plastic surgery. Dental care and other health care services offer excellent price-to-quality value to the great satisfaction of many international patients. The country’s Medical Referral Service will soon be implemented to give foreign nationals information on nearby hospitals with foreign language services. In terms of housing, for the greater convenience of international residents, a special rental agreement format has been developed

exclusively for their use. To improve living conditions in Korea, more apartment complexes reserved for international residents have been built in recent years. In addition, the apartment rental system has been upgraded to allow international residents to pay rent on a monthly basis as opposed to the lump-sum deposit system which is common practice in Korea. For the improved ease of those wishing to see more of what the country has to offer, all road signs are now written in English. A project is currently under way to provide bilingual bus maps and information broadcasting at bus stops although subway information broadcasting has been already provided in Korean and English. The recently introduced Before Babel Brigade (BBB) phone service has also proved popular among international visitors. This simultaneous interpretation service using a special handset currently covers 17 languages. Handsets offered by the BBB may be checked out at airports, train stations and tourist information centers. Meanwhile, the Investor Support Center (ISC), located within the Invest Korea Plaza, a business incubating facility exclusively dedicated to foreign investors, provides settling-in assistance to international residents newly arrived in Korea. Support from the ISC may be obtained both by phone or onsite at the support center’s premises located in southern Seoul. Tips on living in Korea are provided in English, Japanese and Chinese, and a 24hour hotline service (1600-7119) is also provided in English.

Special services for international visitors and residents
The Seoul Metropolitan Government opened the Seoul Global Center on January 23, 2008 as part of its global zone project. The center offers in-depth and specialized services via a network that encompasses all information necessary for living and doing business in Seoul. The center not only provides services for issuance of credit cards and support of mobile phones, driving licenses and immi-

Cheonggyecheon runs through downtown Seoul.

AUTOMOTIVE INDUSTRY
Overview
The Korean automotive industry, the fifth largest in the world for 4 consecutive years from 2005 to 2008, produced 3,826,000 units in 2008, enough to capture a global market share of 5.4 percent. In the 1960s and 1970s, the role of Korean automakers was primarily as assemblers of imported parts. Today, Korea domestically sources the complete spectrum of auto parts and is both one of the leading car-making countries and a fast growing exporter, selling its own independently-developed models. Currently in the Korean automotive industry, 7 production plants for 5 automakers including Hyundai Motor Company, KIA Motors, GM Daewoo, Renault Samsung, and Ssangyong Motor are in operation. Specifically, Hyundai-KIA Motor Group has made a giant leap in recent days as a global automaker thanks to its continuous efforts in global management and toward quality improvement. While the landscape of the global auto industry has been changing due to the 2008 financial crisis, General Motors and Renault have continuously increased domestic investment by maintaining production facilities within Korea and through consistent R&D activities for new cars, respectively. However, challenges still need to be resolved since Shanghai Automotive Industry Corporation gave up its management rights to Ssangyong Motor, placing the Korean car maker under court receivership with the fired employees subsequently going on strike. Nevertheless, global auto parts makers are seriously considering starting business in Korea as the HyundaiKIA Motor Group augments its production capacity, the only automaker to do so in the midst of the financial crisis, by completing, for example, the construction of production bases in the United States and Europe. Accounting for over 5 percent of total domestic manufacturing output and 3.1 percent of total exports (as of 2006), the auto parts sector - which includes many of the world’s leading auto parts manufacturers who have invested in Korea - is a powerful engine for the Korean economy. As of end-2005, some 260 automotive parts makers were foreigninvested firms, of which 173 were tier-1 suppliers representing 35.5 percent of overall parts sales valued at 32.7 trillion won. Of the frontrunners currently ranking among the world’s top 30 players in the global automotive parts industry, the likes of the Delphi and Visteon of the U.S., Germany’s Bosch and Siemens, Denso and Calsonic of Japan, and Valeo from France have invested in Korea.

Business Opportunities

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Outlook
In 2009, the volume of total production will be around 3.6 million units, 1.05 million for domestic consumption and 2.55 million in exports, a 5.9-percent decline from 3,827 million units in 2008 according to the Korea Automobile Manufacturers Association. The government is actively providing financial support to the industry, with the goal of lifting it into the ranks of the global top four by 2012. Various initiatives are underway to raise Korea’s share of the world automotive market to 11 percent and have at least twelve Korean automotive parts makers enter the global top 100. The government also intends to promote the transformation of the automotive parts industry into a high value-added industry through process modernization, the use of new materials, and more ecologically friendly production techniques. Upgrading existing automotive parts clusters will also be part of this plan. sourcing and production from overseas bases. Korea offers excellent business opportunities on both fronts. First, automotive majors worldwide are pressing forth with platform sharing, modularization and global sourcing in order to achieve optimal price competitiveness. Korean automotive parts makers are rated top in terms of both quality and price competitiveness. However, investment opportunities in Korea will continue to remain in the high-tech industries including electric and electronics and basic materials. Secondly, that Korean and foreign automakers have been increasing production in Korea will provide foreign auto parts makers with promising business opportunities to grow hand in hand with car assemblers. Auto companies that do not have any presence in Korea should make inroads into the Korean market at the earliest moment possible to form business ties with Hyundai-KIA Motors.

Investment opportunities Business opportunities
A 2005 survey of 42 American automotive parts makers conducted by KOTRA’s Detroit Korea Business Center found that the top criteria in selecting overseas business bases were market size, growth potential, accessibility to surrounding markets, and skilled labor force, in this order. Korea earned high scores in three of the four criteria and was ranked second in terms of overall investment attractiveness. Two of the most recent major trends in the international automotive industry are global Sectors of diesel engines, automotive electrical components, hybrid cars, electric vehicles, and fuel cells as well as basic materials including rubber and aluminum are the technological areas with high growth potential as they are in demand by the Korean auto industry. Specifically, there have been noticeable developments in automotive semiconductors, sensors, and motors in car electronics as well as in hybrid cars, electric vehicles, and fuel cells from the environmental side. Combined with Bosch’s large scale investment in secondary cells, the sector is projected to show remarkable growth in the future.

With Korea’s maturing automotive industry, it has become difficult to expect further expansion in domestic production capacity. In addition, it will not be easy for new comers to supply parts to Hyundai-KIA Motors as most existing parts makers have tight relationships with OEMs. Against this backdrop, one way to start business with the assembler would be to approach the suppliers of Hyundai-KIA Motors. A foreign company that wishes to become a supplier of these two companies should explore the possibility of a strategic alliance with existing suppliers through investment rather than seeking Greenfield investment. It will be much more effective to introduce new sophisticated technology and supply price-competitive parts through capital joint ventures.

Korea Automobile Production

(Unit: thousand vehicles)

*

*Notes: Presumed production volume for 2009 Source: Korea Automobile Manufacturers Association

SEMICONDUCTOR INDUSTRY
Global market
The market volume of the global semiconductor industry has continued to grow at an annual rate of 5.6 percent from 2003 to 2008, reaching US$258.3 billion as of 2008. The portion of non-memory semiconductors (system chips) takes up most of the market at over 80 percent. The global semiconductor market is expected to grow by approximately 1.5 percent from 2008 to 2013, reaching a market volume of US$282 billion in 2013. Due to the recent economic recession, the environment surrounding the semiconductor industry has seen various changes. In the memory sector, competition in terms of cost will become fiercer and the profit divide between existing players and newcomers will widen further. In regard to system semiconductors, the application of developed products has increased with the convergence and integration of sets. Such trends will intensify market competition among companies in the areas that overlap. Considering the high cost entailed by constructing manufacturing facilities in the semiconductor manufacturing sector, apart from a number of companies such as Intel, Samsung, and TSMC, manufacturing facilities only for specialized technologies will be set up, with the rest being outsourced. In other words, the ‘pep-light’ trend will be further accelerated. mainstay industry of Korea, contributing to 7.6 of overall export, the semiconductor industry reported exports of US$32.8 billion and imports of US$32 billion in 2008, employing 138,000 workers. The structure of the Korean semiconductor industry is centered around memory chips while the competitiveness of system chips, discrete semiconductor devices, equipment and material are relatively weak. In the memory industry, Korean companies dominate the market with technological power based on the manufacturing technology of DRAM, and NAND Flash with Korea’s two largest memory producers, Samsung Electronics and Hynix. In terms of DRAM, Samsung Electronics has started mass production of 2G DDR3 adopting the 40-nano process for the first time in the world, which is estimated to be technologically 18 months ahead of foreign competitors. The system semiconductor industry is made up of fabless companies which design the system chips, foundry companies that are responsible for production, and packaging companies. The volume of the Korean fabless industry has been showing remarkable growth at 37 percent annually with approximately 150 companies including MTekVision and Core Logic in operation. Representative foundry companies are Magna Chip and Dongbu HiTek. Magna Chip saw a 60-percent rise in its revenue from the first quarter of 2009 thanks to an increase in production by their customers. Meanwhile, Samsung Electronics, ranked 11th in the foundry indus-

Domestic market
In 2008, Korea stood among the world’s top 3 semiconductor manufacturers with a market share of 47.7 percent in the U.S., 23.9 percent in Japan, and 9.6 percent in Korea. As a
Semiconductor line at Samsung Electronics’ Giheung plant

Infineon Technology
As part of strategic cooperation with Hyundai Motor Company, Infineon opened the Hyundai Infineon Innovation Center (HIIC) in 2007. The Infineon-Kookmin University Microcontroller Training Center was also established during the same year for the training of engineers, in addition to the Power Semiconductor Research Institute and the Automobile Industry-Security Research Institute. The automotive lab set up by Infineon Technologies Korea carries out joint research and development activities with major Korean automotive electrical component companies on development trials of electrical products for Hyundai and Kia vehicles. The up-to-date automotive semiconductors devel-

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as the persistent convergence trend in terminals. In automotives, recent developments in complex automotive electronic systems related to location tracking, balancing, and sensors of vehicles will increase the demand for semiconductors, leading to continuous growth. Against this backdrop, investment in the Application Specific Standard Products (ASSP), interoperable for telecommunica-

tions, home appliances, as well as automobiles, is expected to be most promising. The future of discrete semiconductors such as analogue ICs and IGBTs are also bright for foreign investors.

Trends in the Global Semiconductor Market
Samsung Electronics’ 40Gb NAND Flash CAGR 5.6% (Unit: US$ billion)

230

239

263

272

258

try in 2008, is nurturing the business of outsourcing production of chipsets.

186

Investment opportunities
The global economic downturn has contracted the electronic device market as a whole, making it unlikely for Greenfield-type investment in semiconductor ICs or manufacturing equipment for facilities. Nevertheless, investment in the R&D stage will continue in order to prepare for future technology. By application, although data processing equipments, mostly PCs, hold the largest portion, its growth will slow down with the emergence of various new applications. Meanwhile, telecommunications is expected to continue at an upward trend as the increase of mobile communications services spur growth in the market for terminals. Demand for telecommunications semiconductors will also grow with the launching of 4G mobile communications services as well

Memory (CAGR: 5.7%) Source: ISuppi, 2009. 3

System Semiconductor (CAGR: 5.5%)

Discrete Device (CAGR: 5.9%)

2008 Global Market Share of Memory IC
Other 1% U.S.A. 8% Germany 10% Japan 16% Taiwan 19% Japan 22%

U.S.A. 33%

Korea 45%

Korea 45%

DRAM
Source: Gartner

NAND Flash

oped at HIIC are further refined to perfection at the Infineon automotive lab. Moreover, Infineon has been forming close cooperative ties with core customers to reclaim the next generation mobile communications market on all fronts including the European mobile phone technology GSM/GPRS, WCDMA, VDSL, and Bluetooth. With 150 employers, Infineon Technologies Korea has doubled in terms of its employment and revenues in the past 2 years. Infineon also received government support in the hiring and training of Korean R&D workforce having been selected as a finalist in the R&D Human Resources Development Project by the Ministry of Knowledge Economy.

DISPLAY INDUSTRY
Current trends and development prospects
Since 2000, the global display industry has seen continued remarkable growth at over 20 percent annually until 2008 when growth stalled at 0.2 percent. The fall was attributed to the slowdown of the global economy and the rapid increase of inventories, leading to a recession in the display industry as product prices began to fall and capital expenditures declined. However, the industry is rapidly rebounding once again with China’s recent execution of a policy1) to offer subsidies for home appliances, the recovery of the European TV market, and the digital switchover of broadcasting in the U.S. which has led to an increase in TV demand, as well as the launching of new models including LED TVs. The market volume of global flat panel displays is expected to rise to US$101.2 billion in 2011 from approximately US$78.4 billion in 2009. LCDs will account for 92 percent of the increment while that for PDPs will decrease slightly from 6.2 percent in 2009 to 4.5 percent in 2011. OLED will show narrow growth from 1.3 percent in 2009 to 2.2 percent in 2011. Flat panel displays include LCDs, PDPs, and OLEDs. Liquid Crystal Displays have been in fierce competition with PDPs as LCD prices fell dramatically from the last half of 2008 due to excessive supply and the effects of a global recession. Currently, market shares of LCD and PDP are 8:2. However, some experts project that, while the technological development in the LCD industry has already reached maturity, there is still much room for development for PDPs. Therefore, if all efforts are focused on increasing profitability of PDPs by developing new applications and high value-added models as well as by making PDPs more eco-friendly, PDPs will surely have a competitive edge. OLEDs are emerging as the next generation display through technological improvements in the new market environment. However, if OLEDs are to become the star of the display market currently divided into two by LCDs and PDPs, OLEDs should first address issues such as high cost, a short life span, and securing of mass production technology of large TV screens. By display device, TVs have the largest market volume followed by mobile devices, monitors, and notebook computers with market volumes of US$38.6 billion, 13.6 billion, 12.5 billion, and 8.4 billion, respectively in 2009. In 2011, the mobile portion is expected to grow to 19.6 percent of all devices, marking 47-percent growth from 2009 and reaching US$20.1 billion. The TV display market will also expand by roughly 17 percent from 2009 to US$45 billion. Korea, Japan, and Taiwan are engaged in fierce competition in the global display industry. As China joins the fray, the market landscape is expected to change in the future. In the first quarter of 2009, Korean companies such as Samsung Electronics and LG Display accounted for 65 percent of global LCD market share, while Taiwan’s AUO and CMO claimed the remaining 35 percent. In the PDP market, Panasonic of Japan ranked first with a market share of 39.8 percent whereas Samsung SDI and LG Electronics stood at 29.4 percent and 21.9 percent, respectively, in the market. As a market total, Korean companies had a slightly larger share than Japan at 51 percent versus 49 percent. Samsung SDI became the leader in the global OLED market after commercializing the technology for the first time in the world in 2007. Leading companies in the display industry including LG Display and Samsung Electronics have made swift investments by newly constructing and augmenting their 8th generation LCD lines, as well as securing a stable source of parts and materials in order to meet the rapidly increasing demand recently for display panels, and find themselves at the forefront of the global display market.

Trends in the display parts and material industry
Despite Korea’s leading position in the global display market, much of the related parts and materials have to be imported. Considering that the cost of parts and materials account for up to 29 percent of the finished product, source technology needs to be urgently secured based on its high cost and the ratio of

The world's thinnest 42- and 47-inch LCD TV panel

1] The Home Appliance Subsidy Program: This is the Chinese government's policy to provide the people in rural areas with subsidies for household appliances. After its trial program was implemented from December of 2007, it has been extended across the nation since February of 2009. Under the policy aimed to promote the provision of home appliances in rural areas and boost domestic consumption, the people living in rural areas receive 13% of product prices from the government.

Market Share in FDP by Technology (2009~2011)
2009
Others 0.8% OLED 1.3% PDP 6.2% Others 0.9% OLED 2.2% PDP 4.5%

2011

US$78.4 BN

US$101.2 BN

LCD 91.7%

LCD 92.4%

Business Opportunities

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localization. The cost ratio of parts and materials for LCDs ranges from 10 percent to 29 percent in the order of BLU, Pol, C/F, Glass, and IC. BLU is composed of CCFL, LED, light guide panels, diffusing panels, reflector sheets, prism sheets and DBEF. All of the reflector sheets and DBEF have to be imported. Among AG TAC, TAC, PVA, Phase Difference, and Protect Film which constitute a Pol, the localization of TAC, PVA, and Phase Difference is 0% which makes them fully dependent on imports. Major glass companies doing business in Korea include Samsung Corning Precision Glass, Asahi Glass of Japan, and Schott of Germany. Market leaders in liquid crystals are Merck (Germany), and Chisso (Japan). Household names in color filters are LG Display, Samsung Electronics and Dongwoo Fine-Chem. Companies including LG Chemical, and Ace Digitech lead the polarizer market, while Taesan LCD, Wooyoung Information Communication, Heesung Electronics and Kumho Electric are major players in BLU, with Samsung Electronics and Magna Chip taking the lead in driver ICs. Within the PDP components sector including FP, BP, and optic, fluorescents and Ag-electrodes are highly dependent on imports with a localization rate of 2 percent and 10 percent respectively. Parts and materials for OLED including driving, organic, and encap as well as die bond materials account for anywhere from 7 percent to 45 percent of the total cost. Among

them, encap materials have the lowest localization ratio at 5 percent, while organic materials stood at 20 percent. In terms of driving and die bond materials, 80~100 percent are produced in Korea. LG Chemical recently announced that it would be starting production in LCD substrate glass after signing a contract with Germany’s Schott to adopt its technology. LCD substrate glass is the portion with the highest added value, accounting for 20% of all parts and material costs for LCD. Affiliates of Corning in the U.S. including Samsung Corning Precision Glass contribute 60 percent to the global market, while Japanese companies such as Asahi Glass, NEG and AvanStrate claim the rest of the market share. By engaging in the LCD substrate glass sector, LG Chemical plans to nurture both the upstream and downstream of the display industry, further accelerating efforts in localizing parts and materials for displays.

competition with Japan, Taiwan and China, Korea needs to be superior in terms of technology by making capital expenditures at the right moment and establishing an environment to commercialize new technology in R&D, as well as making Korean products a global standard. In this regard, the Korean government has set into place a variety of core tasks in order to help the country become a powerhouse in the display industry by 2017 with exports of US$100 billion and 45 percent in global market share. The core tasks are as follows: concentrate development of core source technology for next generation displays, establish private-sector-led “flexible display centers”, promote joint R&D among companies in core areas to improve Korea’s competitive edge in the currently weak equipment, parts and material sectors, pursue industrial standardization and global R&D activities with advanced nations to create a growth infrastructure as well as refurbishing systems to facilitate investment.

Government policy for the development of the display industry
The display industry is placed among Korea’s next generation new growth industries, considering its creation of high added value and characteristics as a comprehensive core industry. Korea is currently leading the display industry as a whole outpacing companies in Japan and Taiwan. However, because of the high dependency on foreign imports for the core materials and source technology used for displays, it is critical for Korea to actively develop new technology and attract investment. Furthermore, in order to hold off

Prospects for FPD Market Share by Device (2009-2011)

Market Share in the Global Display Industry by Country
Section
LCD

Country
Korea Taiwan Korea Japan Korea

Key Player
Samsung Electronics, LG Display AUO, CMO Samsung SDI, LG Electronics Panasonic, Pioneer Samsung SDI RIT Display

2007
43.7% 42.4% 50.3% 49.7% 42.0% 25.4%

2008
46.1% 38.8% 52.3% 47.7% 45.3% 32.2%

PDP

OLED

TVs D Cameras

Notebooks Mobile

Monitors Other

Taiwan

Source: Display Search (Revenue basis)

IT INDUSTRY
Overview
The information technology (IT) industry has served as a national growth engine throughout the past decade both in terms of public policy and business, leading Korean society as well as the national economy. From a policy perspective, Korea was able to establish world class IT infrastructure with the national informatization efforts that started in the 1990s, as well as aggressive nurturing of the Korean IT industry steered by the government. In the new millennium, convergence policies that comprehensively combine services, infrastructure and devices have been pursued to build a safe and sound digital society. From an economic perspective, the IT industry accounted for 9.9 percent of total GDP in 2008 and also contributed a 0.5 percent point rise in the 2.2 percent GDP increase rate during the same period. The IT industry, which has traditionally led economic stabilization at the macro level and played a significant role in Korea’s economic growth, made substantial contributions in generating growth, job creation, as well as improving national trade balances, while accounting for 39.9 percent and 24.8 percent, respectively, in the country’s total exports and imports in 2008. The IT industry can be largely divided into three sectors: IT services, IT devices and software. Total production for the sector in 2007 stood at KRW268 trillion, with IT services contributing to 20.6 percent of the total, IT devices 70.8 percent and software 8.6 percent. The number of IT related firms with 9 or more employees was roughly 15,000 as of the end of 2007.

Domestic IT market environment
As of March 2009, the number of mobile phone subscribers in Korea equaled 46.23 million, or 95.1 percent of the total population. Three major service providers (SKT, KTF, and LGT) are operating in the mobile phone market, with SKT as the dominant player accounting for 50.5 percent of the market along with KTF and LGT competing to increase their share in the market. Local telephony has declined by 4.3 percent yearon-year for 2009 to 22.13 million subscribers after stagnating from 2005. The decline was due to the launching of bundled products (broadband Internet + IPTV + VoIP) at an affordable price by telecom service providers combined with the emergence of a new trend in 2009 where Internet telephony replaced local phones. Broadband Internet services grew from 24.9 percent in 2004 to 31.8 percent in 2008. This upward trend is expected to persist as cable service providers deliver broadband Internet services at a higher speed as affordable bundled products continue to be launched. .

LG’s Prada Phone has been chosen the 'Best of the Best' for 2007 by the Red Dot Design Award committee. The Red Dot Design Award is one of Europe’s most prestigious industrial design awards.

New IT technology
Internet Protocol Television (IPTV) is the most representative service to be launched in 2008 and 2009. IPTV enables users to enjoy conventional TV programs and videos using Internet protocol. In Korea, IPTV services refer to real-time TV programs delivered to television receivers over the broadband network, a premium network that guarantees

Cisco
A leading telecommunications network company, Cisco designs, manufactures, and supplies IT networking equipments and management solutions to the world, with a larger market share than any other company worldwide in all sectors related to networks. Cisco Systems, Inc. was founded in 1984, and currently has over 67 thousand employees globally with annual revenue of US$39.5 billion in 2008. Cisco was also selected as the most respected company in its industry in the U.S. by Fortune Magazine. Cisco’s Korean branch

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quality of service. Three service providers were licensed in September 2008. Qook TV (formerly Mega TV) from KT, BroadN TV (formerly Hana TV) of SK Broadband (formerly Hanaro Telecom), and myLGtv from LG Dacom currently deliver IPTV services to the Korean market. As of June 2009, approximately 467,000 people have subscribed to IPTV services, reaching a whopping 1.68 million when this total is combined with VOD subscribers.

Future industrial trends and opportunities
With growing attention on low carbon, green technology of late, areas such as green IT technology have received new light. Moreover, the IT industry will continue to grow as a ubiquitous environment is being universally established based on low power technology through the networking of smart devices. In 2009, the government announced the national strategy for green growth and a 5-year plan through the Presidential Committee on Green Growth and selected 3 focal sectors and 10 major policy directions on which the government will concentrate its efforts in the future. The government defined ‘green growth by IT convergence’ as ‘where green and IT technology converge’, and declared its wish to become one of the 7 major green nations by 2020, and one of the top 5 by 2050, through the development of eco-friendly IT technology as a new growth engine, as well as transforming the country into a lowcarbon smart convergence society. In Korea,

the government’s green growth strategy will create new growth engines by upgrading industrial structures and establishing a strong foundation for a green economy. From around the world, leading companies have shown much interest in the potential of Korea’s green sector strategy. In particular, Cisco, a network equipment company, has been seeking transformation into an integrated network platform service provider by participating in eco-friendly low-carbon city development projects utilizing IT technology. To this end, Cisco signed an MOU with Incheon Free Economic Zone for a new town development project, announcing a commitment to invest US$2 billion in Korea. With its participation in the Global Centre of Intelligent Urbanization (GCIU) Project, Cisco will develop new network platforms and solutions in the course of working with IT companies in Korea that hold green technology to build an eco-friendly city.

iriver PMP P7

Total Production of the Korean IT industry
(Unit: KRW trillion)

IT service IT device SW, Computer related service Source: Korea Association of Information & Telecommunication

has 350 employees and generates an annual revenue of KRW600 billion. Cisco Korea is actively promoting plans to transform Korea into a global hub for the development of intelligent cities by announcing the establishment of a u-city global R&D center in Songdo to develop technologies and solutions related to intelligent cities, and operate test beds to make inroads into overseas markets.

BIO INDUSTRY
Bioclusters in Korea
- 9 Bio Venture Centers - 16 Regional Technology Innovation Centers

Current trends
The bio industry covers areas related to producing useful material and services for the purpose of improving health, and preventing as well as diagnosing and treating diseases by making use of functions and information of bio organisms based on life science technology. The bio industry has served as a locomotive for new technology in Korea as many factors converge, including stem cell research, genetic recombination technology, technological competitiveness in cell fusion and protein engineering, combined with Korea’s prowess in information processing and analysis based on the country’s sophisticated IT infrastructure. As of 2006, the volume of Korea’s bio industry was KRW4.9 trillion, accounting for 2 percent of the global bio market. When looking at production by type, bio-food and drugs took up over 80 percent, with biochemistry, bio environment, bio analysis and R&D, as well as bio process and equipment filling the remaining 20 percent. Bio drugs account for 62 percent of domestic demand whereas only 39 percent is produced in Korea, making the country highly dependent on imports. Meanwhile, bio food recorded a net surplus with 43 percent being produced in Korea, although accounting for only 13 percent of the domestic market. More than 580 pharmaceutical companies, 600 bio start-ups, and 250 functional food makers are doing business in Korea, and over 30,000 bio science majors are graduating from universities every year. In 2008, 5,755 SCIE level theses were published, with 229 rated IF (impact factor) 10 or over among

BERNA
Berna Biotech Korea, a pharmaceutical firm specializing in vaccines, was established in 2000 as a joint venture between Greencross and the Dutch company Reign Biotech under the name Greencross Vaccine. Reign Biotech, a pharmaceutical firm possessing vaccinerelated source technologies and an international network, subsequently increased its interest in Greencross Vaccine to 80 percent, betting heavily on the preventive capacity and revenue potential of the hepatitis B vaccine developed by the latter. Reign Biotech has also channeled massive investments into technological development and opened a research institute - the Greencross Vaccine Institute - to support its R&D activities. In 2002, Reign Biotech was bought out by Swiss firm Berna Biotech, and four years later in 2006, Berna Biotech merged with the Dutch biotech company Crucell. Greencross

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them. In particular, the number of theses that were featured in the 3 major bio science journals was 23 in 2005, 18 in 2006, and 16 in 2007. Patent applications in bio science have also been increasing, putting Korea 13th in the technology power index in 2007 with 170 patent applications registered in the U.S.

Engine’, the ‘Basic Plan to Develop National Convergent Technology’, the ‘Comprehensive Plan of Global Science Business Belt’, and ‘Advancement of Medical Service Industry’ all feature core sectors of bio science, putting the industry at the receiving end of policy and financial support.

Strong government support
Recognizing BT as one of Korea’s national core strategic industries along with IT, the Korean government has been providing full support while continuously investing in R&D. Research and development for BT was allotted the largest portion at KRW2.15 trillion or 17.4 percent of the total national R&D budget in 2009. After the first basic plan for the promotion of bio science was completed in 2006, “Bio-Vision 2016” a national policy blueprint for bio science in the period from 2007 to 2016 has been in motion. “Bio-Vision 2016” was created by 8 government agencies including the Ministry of Education, Science, and Technology, with a goal to secure Korea’s position as a global BT powerhouse by developing source technologies and establishing necessary infrastructure for the industry with an investment of over KRW14 trillion. This is a substantial increase in the amount considering that government investment during the period of the first basic plan for the promotion of bio science was KRW4.3 trillion. Government support will be specifically concentrated in the following areas of R&D: post-genome R&D, IT・BT・NT convergent technology, brain research, as well as stem cell research. Furthermore, government policies including the ‘Measure to Nurture New Growth

Bioclusters
The Korean government and local governments have actively promoted the establishment of bioclusters to create a regional industrial foundation in bio science. In line with industrial policies, 9 bio venture innovation centers and 16 regional specialized bio centers were opened from 2002 and the Korea Bio-Hub was set up to support their activities. As part of a national project, a biocluster was established in Osong and Incheon was designated as a biomedical hub to attract high-tech specialized hospitals and R&D centers from advanced nations. Other bioclusters are also being set up by regions. In order to support the development of sophisticated new drugs and medical equipment, the government has made a decision to build a biomedi cluster in Daegu and Osong by 2012 and will invest KRW5.6 trillion until 2038.

system, cell therapy products for incurable diseases, targeted cancer drugs, and disease treatment drugs are the most promising areas. In bio organs, the future for functional cell therapy through regeneration, tissue engineering products, and xenogeneic organs appears bright. In bio chips, there are high hopes for the development of diagnostic technology using genetic chips, protein chips, and cell chips with advancements in convergence technology combining bio science with IT and NT. The production and clinical trials of bio similar also have bright prospects for the future. Related areas of bio similar have been gaining more positive attention as Samsung Electronics recently announced a 5-year investment plan of KRW500 billion after adding the production of bio similar to its business portfolio. Moreover, global pharmaceuticals have given Korea high marks on her capacity for clinical trials in the adeptness of researchers, facilities to gather patients, and in regard to the fact that there are 12 regional clinical trial centers. As a result, over 216 multinational clinical trials were conducted in Korea in 2008, by far the highest in Asia. Hopes for BT convergent technology, which can optimize Korea’s competitive edge as an IT powerhouse, are also growing. Seoul National University and KAIST jointly established the ‘International BIT Port” in the Cheongna district within the Incheon Free Economic Zone to develop next generation System on Chips (SoC), artificial senses, biomimetics, u-Health services, and nano molecular imaging.

Investment opportunities
The government supports the industry for bio drug and organs as a next generation industrial growth engine considering its high growth potential and contributions for the Korean economy. The bio drug and organ industry can be divided into 3 fields: bio drugs, bio organs, and bio chips. In the bio drug field, the selective high-efficiency drug delivery

Vaccine was renamed Berna Biotech Korea during the same year. The construction of a cutting-edge vaccine production facility in 2005 doubled the company’s production to over 177 million doses annually. As of June 2007, roughly 470 million doses have been sold. In the meantime, Berna will be moving to Songdo International City within the Incheon Free Economic Zone. Berna is also set to be the first company to receive tax reduction incentives (5-year exemption and 2-year 50-percent cut on national corporate tax, income tax and local tax including acquisition and registration tax, as well as property tax) in the Incheon Free Economic Zone. The decision to do so was made on the anticipation that such incentives will not only facilitate additional foreign investment into Korea’s Free Economic Zones but also create jobs and contribute to increasing exports.

“Capillaries and red blood cells,” a winning entry of the Biomicroscopic Photography Contest organized by the Osong Bio Promotion Foundation

ENVIRONMENTAL INDUSTRY
Current trends and prospects
The environmental industry is indeed crucial to tackling the increasing consumption of energy and resources globally, which is one of the direct causes of environmental pollution and global warming. Accordingly, the scope of the environmental industry is now expanding to include not just the after effects of pollution-causing substances but also the areas that prevent and reduce pollution, and restore the environment, and that provide technologies and products for efficient use of resources. In the 21st century, the environmental industry is being converged and integrated with other industries that enable ecofriendly production of products, the development of new and renewable energies, IT, and BT (Bio Technology) and is expanding to more diverse areas such as eco villages and eco industrial parks. The global market surrounding the environmental industry has shown continuous growth since 2000 and its size is expected to reach KRW1,100 trillion by 2015. In particular, the environment-related market in emerging economies such as the BRICs and Middle East and Asian countries facing imminent environmental problems will grow at an annual rate of over 10 percent. Korea’s environment market has been also growing at a double digit rate annually since 2003, taking up 3~4 percent of the country’s GDP. In response to the global trend in which the environment market is gaining greater importance, environmentally advanced economic blocs and countries like the EU, Japan, and the U.S. are rapidly shifting toward an economic structure that focuses on saving resources and using energy in an eco-friendly manner. In the meantime, developed countries are providing government-level initiatives to strengthen the competitiveness of the industry and dominate the market, through which they can restore growth potential. Based on their advanced environmental technologies, the aforementioned countries have introduced strong environment regulations to contain new developing countries while utilizing it as a trade barrier to protect their own industry. Korea is also pursuing a low-carbon or zero-waste policy, which is helping the country move toward a green growth society

Top 10 Environmental Technologies
Top 7 Core Technologies
1) Advanced Water Treatment Technology 2) Green Car Technology 3) Climate Change Technology 4) Soil and Underground Water Remediation Technology 5) Biological Resources Utilization · Restoration Technology 6) Advanced Environment · Health Technology 7) High-efficient Resource Recovery Technology

Top 10 Environmental Industries
1) Environment Plant Business including Water Supply and Drainage 2) Green Car Industry 3) Carbon Market 4) Meteorological Industry 5) Soil Remediation Technology 6) Biological Resources Industry 7) Urban Mining 8) Eco-tourism Industry 9) Eco-friendly Product Industry 10) Environmental Consulting Industry

Top 3 Source Technologies
8) Convergence-based Technology for Environment Pollution 9) Technology to Develop Alternatives for Green House Gas 10) Eco-friendly Product Technology for Life

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with a virtuous development cycle of the economy, society and the environment.

Government policy to promote the environmental industry
With its Low Carbon Green Growth policy, the Korean government is not only reacting to climate change but is also creating new growth engines of green technologies and green industries and enhancing their competitiveness in the global environment market. As an initial step, the government has designated ten environmental technologies where Korea can secure competitive advantage and augmented R&D investment in those technologies while facilitating industrialization of the focal areas through green finance. The government also supports key industries like the automobile, machinery, steel industries to help them adopt sustainable production methods.

invested overseas. This is closely related to CMD (Clean Development Mechanism), a market system for green house gas reductions under the Kyoto Protocol and the carbon credit business. Today, Korea stands only at the 40-60-percent level of advanced countries in terms of high-tech environmental technology, with a mere 3-percent share in the global market. Furthermore, most Korean companies in this field are relatively small and lack sufficient resources to invest in new technologies. Yet, the level of Korea’s environmental technologies that can be converged with the country’s key industries is good enough to adapt to the global structure for division of force. The industries that turn waste into energy through recycling, restore soil, recycle precious metals and are engaged in urban mining are evaluated to have high potential for domestic demand and growth. Such global structure of division of force and the growth potential of the Korean environmental industry will be able to provide a variety of business opportunities to foreign investors.

Twilight view of the Yeongdeok Wind Power Complex

Investment opportunities
When following green growth, Korea’s environment industry is expected to select the fields and processing where it has global competitive advantage to focus its efforts on. This is in line with the global strategy for division of labor that has been under way across the globe. Advanced countries (companies) specialize in the R&D sectors in the valuechain where they have competitive advantage while investing in countries like Korea with mid-level technological capabilities for production of needed parts and materials, and where finished goods can be assembled and produced. Then projects are exported to environmentally vulnerable countries or are

Scandinavian Biogas Fuels
Scandinavian Biogas Fuels (SBF), based in Uppsala, Sweden, is a world class environmental company with highly sophisticated technology that produces biogas with organic wastes, which is then sold, and generates power for commercial use. Scandinavian Biogas Fuels is now engaged in a project to build a biogas production facility in Korea by utilizing sewage sludge in the Yong Yeon Quality of Water Improvement Office in Ulsan. Under the London Convention, the ocean dumping of organic wastes is to be banned from 2012. After seeing an opportunity in Korea, given the fact that Korea has treated organic wastes such as animal manure and food wastes by dumping them into the ocean, SBF has tried to expand into Korea from 2006. In 2008, with the support from the Ulsan municipal government, the SPF set up Scandinavian Biogas Fuels in Korea, and construction on the facility is expected to be complete by late 2009.

PHOTOVOLTAIC POWER GENERATION
the 2nd plan, has been revised upward to 4.3GW by 2030.

Goal for Renewable Energy Supply
(Share in the Primary Energy Supply, %)
11.0

6.1 4.3 2.6 3.0

Source: Ministry of Knowledge Economy

Solar installations at the Jinhae Energy & Science Park

Policies to promote the photovoltaic industry
In 2007, the proportion of renewable energy in Korea was 2.4 percent out of the total amount of primary energy used, and merely 1.2 percent as of late 2008 in terms of the total amount of power generated. In 2003, the 2nd national basic plan for renewable energy aimed to increase the proportion of renewable energy to 5 percent by 2011, which was later found to need overall revision due to an insufficient technological and institutional background. The 3rd national energy plan released in August 2008 aims to increase the proportion of renewable energy to 11 percent for primary energy, while photovoltaic power, which was planned to reach 1.3GW by 2012 in

The Feed-in-Tariff (FIT) introduced in 2004 is a successful policy to rejuvenate renewable energy, which has led to remarkable growth of the photovoltaic industry in Korea. With the policy, the accumulated capacity of Korea, with a total of 939 PV power plants, reached 357MW as of late 2008. In 2008 alone, a PV power plant with a capacity of over 275MW was built, thanks to policy changes and improvements in market ability of renewable energy that resulted from the FIT and jump in oil prices. A system placing a marginal cap on photovoltaic generation (500MW until 2011) was adopted because of the limited government budget, and the government is aiming to gradually develop the country’s PV industry. Residual support capacity of 200MW will be appropriately divided until 2012 when the FIT system expires. With the adoption of an annual cap scheme of 50MW in 2009, 70MW in 2010, and 80MW in 2011, the government aims to assist the soft landing of the market as well as provide continuous support at the

FDI case study
Turnkey solutions for cell and module production processes are currently dominated by a few providers from the U.S., Germany and Japan, with a relatively high entry barrier. For this reason, a viable strategy for multinational companies seeking to expand their presence in the Korean market is to forge a strategic partnership with Korean companies that have recently entered the PV parts business. A case in point is Germany’s Roth & Rau which announced a joint investment plan with its Korean partner, Hydrogen Power, at the 2nd Korea Regional Investment Fair in July 2009. The joint project, with KRW160 billion

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Current Trend and Prospect of Korea’s PV Market
(Unit: MW)

Current Trends of Major Companies by Supply Chain
Index
Feed-in-Tariff For Business RPS Trial Project (New) Subtotal Green Home, Local Dissemination, General Dissemination

09
50 21 71

10
70 32 102

11
80 49 129

Total
200 102 302

Phase
p-Si Ingots

Major Companies
OCI, Hankook Silicon, KCC (KAM), Woongin Poly Silicon

Siltron, Rexor, Neosemitec, Smartace, Woongjin Energy, Nexolon, Glosil Wafers Cells Modules KPE, Millinet, HHI, Shinsung, Hanwha, STX, Korea Steel STX, HHI, LS, Dongyang Creditech, Symphony Energy, S-Energy, KD Solar, Unison, Solartech, Solarworld Korea

For Households

27

30

33

90

Total

98

132

162

392

Source: Ministry of Knowledge Economy

same time. With the adoption of the Renewable Portfolio Standard in 2012, if the mandatory quota of 102MW for the initial 3 years is distributed in advance, performance on early distribution will be given an incentive in order to settle the Renewable Portfolio Standards system in the market early on and to nurture a stable domestic market for PV.

Current trends and market prospects
Since OCI Company (former DC Chem) made inroads into the poly silicon sector (poly silicon is used as feed stock), and began to implement government policy tasks in 2006, other Korean companies have also started to advance into every part of the value chain. Initially, the companies began as small-and-medium-sized niche suppliers and then expanded their business by integrating relative industries, eventually having the capability for mass production. The recent trend in the Korean PV providers is vertical integration by large corporations like Samsung, LG and Hyundai Heavy Industries

(including KRW100 billion in FDI), plans to produce 48MW thin film solar cells from April of 2010 at a 40,000m2 area within the Dalsung Industrial Complex in Daegu. This joint effort represents an excellent example of cooperation in the Korean PV power market. Germany’s Solarworld is also involved in the joint project to produce 240MW PV modules with a goal to expand its capacity of 1GW modules, the largest volume by one production site.

PHOTOVOLTAIC POWER GENERATION_CONTINUED
p-SI Capacity (2009-2012)
2008 DC Chemical (OCI) KCC (KAM) HK Silicon Woongjin Polysillicon LG Chemical Samsung Petrochemical Hanwha Innovation Silicon (UMG) Total 3,600Ton 10,100 33,000 52,850 3,500 100 2009F 10,000 100 2010F 22,000 3,800 2,500 4,700 2011F 27,000 6,100 6,000 5,000 5,000 3,000 750

(Unit: MT)
2012F 31,000 13,500 9,000 6,800 10,000 9,000 3,750 5,000 88,050

As of 2009, global supply of solar grade poly silicon is estimated to be around 59,000MT, about half of the global production capacity of 128,000MT. However, due to the global economic recession, supply will grow larger than demand by 10,000MT. In case of Korea, the supply of poly silicon by OCI and KAM until late 2009 is expected to be 10,100MT and in late 2010 when commercial production by Woongjin Polysilicon and Hankook Silicon begins, the supply will rise to 33,000MT and 88,050MT by late 2010 and 2012, respectively. As of 2008, Korea’s solar cell production accounted for about 1 percent of the global total or 166MW, but will rise to 9.4 percent or 4.2GW as large corporations in Korea such as LG, Samsung and Hyundai Heavy Industries expand their facilities prior to 2012.

Capacity M/S (2010)
Woongjin Polysilicon HK 14% Silicon 8.0% KCC (KAM) 11% DC Chemical (OCI) 67%

Investment opportunities
The current Feed-in-Tariff program for photovoltaic generation that features marginal and annual caps on total generation has served as an obstacle for Korea’s photovoltaic industry, stalling growth potential. However, considering limitations in regard to available land in Korea, the government is deliberating the possibility of further dividing base prices into smaller sections according to the location of the installment, shifting from the current base price structure which has 5 categories according to capacity and also favors small capacity under the existing base price system for subsidies in photovoltaic generation. The new system will favor not only small capacity but also building integrated forms of photovoltaic generation. With such revisions, the rooftop installations market which is linked to the 1 million green home construction project and the building integrated PV market will be further expanded. In addition, the manufacturing of next-generation thin film PV cells and equipment is seen as a more promising area for investment than the conventional crystalline silicone type PV parts and materials, given that Korea is a late comer to the PV market, and in regard to the fact that Korea can make use of its accumulated know-how and infrastructure in displays as well as in semiconductor manufacturing.

Source: Displaybank

Prospects for Global Solar Cell Production for 2006-2012
Production Capacity (MW) Ratio (%)

Source: Ministry of Knowledge Economy

Korea

World

Ratio

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LOGISTICS INDUSTRY
Global trends
It is hard to define the current state of the logistics industry since it is becoming globalized while at the same time becoming more diversified. Yet, in terms of global container cargo volume, the industry is projected to reach 470 million TEUs in 2010, up from 320 million in 2000. Moreover, the logistics industry is an attractive area for investment with its high potential for profitability and growth. With regard to port logistics, liner shipping and unloading companies are accelerating their expansion into the global logistics sector and investment financial institutions are actively engaged in M&A in this area. Global Terminal Operators such as HPH (Hong Kong) and PSA (Singapore), posted returns on sales of 33 percent and 25 percent, respectively, higher than the manufacturing average of approximately 10 percent, which is a testament to the strong growth of this sector. Global shipping companies like Maersk, APL, NYK, K-Line, and MOL are making great strides to become global 3PL providers (third-party logistics) so as to secure significant market share and strengthen sales capabilities. This is in line with the trend that shippers are focusing on their core capabilities while having other business functions taken care of by other parties, in order to make their logistics services more sophisticated. Over 90 percent of manufacturers in Europe are now utilizing 3PL services, which will certainly become an inevitable trend in Korea. In this light, logistics services are moving from the era of 3PL to 4PL.
Night view of Busan Port

Domestic trends
Cargo volume in Northeast Asia by key economic players including Korea, China, and Japan has continued on an upward trend with an annual growth rate of 14.1 percent supported by the rapid surge of the Chinese economy. Despite the current global economic slowdown, the strategic value of the Northeast Asian market is still high from a mid- to long-term perspective. Against this backdrop, policies are being promoted to attract more cargo by creating adjacent clusters at an earlier point as well as attracting foreign logistics companies around major stronghold ports including Busan Port, Gwangyang Port and Incheon Port. The number of logistic service providers registered in Korea was 65,469 as of 2005, the

Joint Investment Project for a Tank Terminal by Germany’s Oil Tanking within the Yeosu National Industrial Complex The project kicked off after a joint venture contract was signed among the following 3 parties: the Korea National Oil Corporation, ”O” the world’s 2nd largest oil tank terminal operation company, and a Swiss company “G” the world’s largest oil trader in September 2009. An agreement was made to construct a oil tank terminal with a storage capacity of 600 million barrels that consists of 57 tanks over an area of 211,333m2 on a site owned by the Korea National Oil Corporation within the Yeosu National Industrial Complex. The volume of foreign direct investment is estimated at US$270 million as of

result of consistent annual growth of 5.6 percent since 2001. Total revenues during the same period were KRW66.1 trillion, a result of 9.6 percent annual growth. The volume of Korea’s logistic market is expected to reach KRW119 trillion in 2010, up from KRW97 trillion as of 2007. In line with global trends, once the system for a comprehensive logistics industry is established in Korea, the outsourcing rate, or the utilization rate of 3PL will increase to the level of 70 percent by 2010, up from 50 percent in 2007.

National basic plan & revision for logistics
In June 2006, the Ministry of Construction and Transportation revised the “Cargo Distribution Promotion Act” and the “Distribution Complex Development Promotion Act” into the “Basic Act for Logistics Policy” and the “Act for the Development and Operation of Logistics Facilities” together with the former Ministry of Maritime Affairs and Fisheries in order to establish an integrated national logistics policy implementation system. The “Basic Act for Logistics Policy” will come into effect from December 10, 2009. According to the “Basic Act for Logistics Policy”, the Minister of Land, Transport and Maritime Affairs will also hold the post of Chairman of the National Logistics Policy Committee to facilitate the licensing of 3PL as well as comprehensive logistic companies. Businesses specializing in logistics will also be nurtured. In addition, the management of the logistics information network that was dispersed by agencies and functions such as by airports, railways, ports, and roads will be integrated and linked, creating and activating a comprehensive logistics information network and a national integrated logistics database by the Ministry of Land, Transport and Maritime Affairs.

Port of Gwangyang

industry has been designated as a growth engine industry with plans to promote comprehensive logistic companies and a market for 3PL, making its future also bright. Lastly, the development of the oil logistics industry has been selected as a major task by the government. In this regard, major petrochemical clusters in Korea were designated as oil logistics hubs for Northeast Asia to attract leading oil logistics companies from home and abroad. Therefore, increased investment or new investments by global companies are promising from the mid-long term perspective.

Investment opportunities
In order for Korea to become a global logistics powerhouse, the government will continue to create global logistic hubs including airports and ports for the purpose of generating national wealth as well as improving the efficiency of national logistics systems. Furthermore, the government will carry on with large scale investments to establish high-tech logistic clusters. The operation of port terminals and new constructions of ports as well as core distribution centers within logistic clusters represent promising areas for investment. Furthermore, the logistics

2009. The real amount is expected to rise once construction starts in the second quarter of 2010. The project was made possible because the interests of the government and related agencies coincided with those of the global companies. The government and its agencies were committed to upgrading major Korean petrochemical ports into oil logistics hubs in Northeast Asia while the global companies were seeking a location to create a stronghold in the region. Fierce competition is expected between the major investor “O” and its rival “V”, a Dutch company, to secure a strategic base in the region. The project will therefore make substantial contributions to the national economy as well as serve to facilitate local business.

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REAL ESTATE DEVELOPMENT
ing and the property market is recovering. The OECD Composite Leading Indicators has predicted that Korea, with a 3.5-percent growth rate, will recover the fastest among the 30 member countries (Korea actually post the 2nd highest Q2 GDP growth among OECD members at 2.6%). These positive signals have helped restore investor confidence in the Korean property market, which lead to 3.7 times higher returns in May 2009 compared to the previous year. Such increases in returns implicate that capital is flowing into Korea due to growing foreign investment in the country.
Bird’s-eye view of Incheon Bridge

Due to the financial crisis, the global real estate market is becoming more flexible. The collapse of the investment banking sector, a major player in project financing, an essential part of development projects, is having a significant impact on the new development market. The implications are, in particular, larger on the development of new property rather than on the markets driven by domestic demand such as housing and commercial building and the SOC industry. However, as economic conditions improve, the overall property sector is expected to grow in a stable manner. In addition, with the start of long-term large-scale projects rather than short term investment, the property market has been gaining global interest The Korean government has recently announced a policy to ease regulations on the property market and begun to sell non-performing banks involved in real estate project financing, which indicates that the financial soundness of financial institutions is improv-

With economic recovery taking place faster than the global average, Korea, which has a stable market condition for property development due to support from the central and municipal governments, is emerging as an important destination for investment in Northeast Asia.

Commercial buildings
The commercial building sector in Korea posts low vacancy rates. In case of A or premium–level buildings in Seoul, before the financial crisis, vacancy rates hovered around 1.4-1.8 percent, and rose to 3-3.4 percent during the crisis. In particular, the commercial real estate market in Seoul has a supply shortage and is shifting from short-term hitand-run to long-term trading in search of profits, while equity ownership is replacing sole ownership. Skyscrapers are enjoying abundant FDI inflows and prominent examples are Parc1, now under construction, in Yeouido, SIFC (Seoul International Finance

AMEC AMEC, a global project development and construction giant headquartered in London, U.K., is the primary contractor for building the Incheon Bridge. This bridge project which will link the Incheon International Airport with Songdo International City and Gyeongin Expressway - a total distance of 21.5 km entered the initial construction phase in 2005 and is scheduled for completion in Oct. 2009. AMEC signed a memorandum of understanding (MOU) with the Korean Ministry of Finance and Economy (the current Ministry of Strategy and

Center) and Incheon Tower soon to be built in Songdo.

SOC (Social Overhead Capital) projects
After the Korean government announced its balanced development policy for the nation, municipal governments began to support investment in the SOC sector. Korea’s total SOC stands at 70 percent of the OECD average and a mere 50 percent in railroads. In terms of water resources, although the country’s SOC is currently around 1 percent, it will gradually increase as the government pursues the four river restoration project. A railroad project that connects the metropolitan and peripheral areas will be completed by 2012 under a BTO (Built-Transfer-Operate) system. When it comes to land bridge projects, the project that links islands in South Jeolla Province is in motion under BTO.

as such in 2007, is set to host bio, R&D, and auto parts centers in order to evolve into a world class cluster of high-tech industries. The Daegu-Gyeongbuk FEZ aims to become a cluster for the textile industry, while also providing a base for fashion, education and components·materials. Other FEZs like that in Saemangeum, will strive to construct a business complex for the high-tech and leisure·tourism industries. The Leisure Corporate City Project is now under way in two areas including Taean and Yeongam. When complete, these areas will support the culture, tourism and leisure sports industries, valuing them as future growth engines. Corporate city projects are being conducted in Wonju, Cheongju and Muan. Aside from these projects, each municipal government is also carrying out projects of their own, while some are attempting to establish innovative cities in

accordance with their own regional characteristics. Such development trends have become prevalent in Northeast Asia, especially in Japan, Korea and China. For Korea, the country needs to consider the regional characteristics and related industries in order to attract investment.

Large-scale development projects
Among real estate development projects, most attention is concentrated on regional development projects with high potential and massive government support. Currently, there are large-scale projects underway such as Free Trade Zones (FTZ), Leisure Corporate City, Corporate City and Jeju Special Self-governing Province Development Projects. Regarding Free Trade Zones, three sites including Incheon, Busan·Jinhae, and Gwangyang were designated to conduct international trade and projects aimed at attracting investment for logistics-based cities. Unlike the existing port-type FEZ, the Yellow Sea Free Economic Zone designated

Aerial view of the future Taean Tourism and Leisure City

Finance) in 2005, placing it in charge of the development of the international business zone situated to the north of Incheon International Airport. The International Business Zone, upon its completion in 2010, will include among its environs an international business complex, hotels, performance venues, a water park, upscale residential buildings and international schools.

Business Opportunities

34 35

Invest KOREA
Introduction
Invest KOREA, established in 2003, is the government organization officially charged with attracting foreign direct investment into Korea. With its head office located within the KOTRA building, Invest KOREA provides a comprehensive suite of one-stop services to meet the diverse needs of foreign investors ranging from investment and incorporation consultation to information on available incentive programs, assistance with the selection of plant sites and license and permit applications, and other formalities, as well as practical support related to living in Korea not to mention post-investment support - all of which are intended to help speed up the process of adaptation and settling in for foreign investors.

Office of the Investment Ombudsman (OIO)
Established in the KOTRA in accordance with the Foreign Investment Promotion Act of 1998, the Office has helped resolve practical and administrative difficulties encountered by foreign-invested firms in Korea. The Ombudsman, the head of the organization who is appointed by the President of Korea, works in close cooperation with a team of ‘Home Doctors’, namely specialists in the various fields relevant to foreign investment who are mandated to help find solutions to the problems investors face. When deemed necessary, the Investment Ombudsman introduces changes to the government’s basic foreign investment policy or investment systems, proposes them to the Foreign Investment Committee, the highest decisionmaking body. By working closely with FDI policymakers, the Ombudsman’s office has successfully intervened on behalf of many foreign companies in Korea. The Office of the Investment Ombudsman’s impressive track record in assisting investors has earned it the Best Post-Investment Service Award by the

World Association of Investment Promotion Agencies (WAIPA), presented during the Geneva conference in March 2007.

Invest Korea Plaza (IKP)
Invest Korea Plaza is a business incubation facility dedicated exclusively to foreign investors located within a state-of-the-art intelligent building. As this building is just a stone’s throw away from KOTRA headquarters, where Invest KOREA’s offices are located, tenants of IKP have access to the comprehensive services including feasibility studies and consulting services provided by Invest KOREA’s staff of experts in addition to representatives seconded from Korean ministries and administrative sectors. Meanwhile, the Investor Support Center (ISC) within IKP provides settling-in support to foreign investors and their families to help facilitate the transition process.

Project manager (PM) system
Invest KOREA assigns a project manager to each of the foreign companies it assists in order to offer more personalized service throughout the entire process of investing in Korea, from investment consultation to the issuance of business licenses and permits, the launch of operations, and post-investment management. Currently, around 100 such project managers are working with foreign direct investors in various stages of investment to facilitate the process and ensure that all the benefits for which they may be eligible are being taken advantage of. Project managers receive continuous in-service training to update their skills, and new project managers are regularly recruited to expand Invest KOREA’s service capability.

Invest Korea Plaza and the KOTRA building in which Invest KOREA is located

“Invest KOREA is an essential organization to know when doing business in Korea. The staff is very friendly, knowledgeable and professional. They have been a remarkable organization for investors solving hundreds of problems each year. It’s very clear that Invest KOREA is a real benefit not only to investors but to the entire community as well.”
Terry Tuharsky, former Chairman, Canadian Chamber of Commerce in Korea

Invest KOREA’s Global Network
39 Korea Business Centers Supporting Foreign Investors Worldwide
HEAD OFFICE
13, Heolleungno, Seochogu, Seoul, Republic of Korea Tel: (82-2) 3460-7545 Fax: (82-2) 3460-7946, 7 ikonline@kotra.or.kr www.investkorea.org

NORTH AMERICA
New York, USA* Tel: (1-212) 826-0900 Fax: (1-212) 888-4930 Los Angeles, USA Tel: (1-323) 954-9500 Fax: (1-323) 954-1707 Chicago, USA Tel: (1-312) 644-4323 Fax: (1-312) 644-4879 Dallas, USA Tel: (1-972) 243-9300 Fax: (1-972) 243-9301 Washington D.C., USA Tel: (1-202) 857-7919 Fax: (1-202) 857-7923 San Francisco, USA Tel: (1-650) 571-8483 Fax: (1-650) 571-8065 Detroit, USA Tel: (1-248) 355-4911~3 Fax: (1-248) 355-9002 Vancouver, Canada Tel: (1-604) 683-1820 Fax: (1-604) 687-6249 Toronto, Canada Tel: (1-416) 368-3399 Fax: (1-416) 368-2893

EUROPE
Frankfurt, Germany* Tel: (49-69) 2429-920 Fax: (49-69) 2533-89 Hamburg, Germany Tel: (49-40) 3405-740 Fax: (49-40) 3405-7474 Munich, Germany Tel: (49-89) 2424-2630 Fax: (49-89) 2424-2639 Paris, France Tel: (33-1) 5535-8888 Fax: (33-1) 5535-8889 Moscow, Russia Tel: (7-495) 258-1627 Fax: (7-495) 258-1634 London, UK Tel: (44-20) 7520-5300 Fax: (44-20) 7240-2367 Brussels, Belgium Tel: (32-2) 203-2142 Fax: (32-2) 203-0751 Milan, Italy Tel: (39-02) 79-5813 Fax: (39-02) 79-8235 Zurich, Switzerland Tel: (41-44) 202-1232 Fax: (41-44) 202-4318 Stockholm, Sweden Tel: (46-8) 30-8090 Fax: (46-8) 30-6190 Copenhagen, Denmark Tel: (45) 3312-6658 Fax: (45) 3332-6654 Amsterdam, Netherlands Tel: (31-20) 673-0555 Fax: (31-20) 673-6918 Vienna, Austria Tel: (43-1) 586-3876 Fax: (43-1) 586-3979 Madrid, Spain Tel: (34-91) 556-6241 Fax: (34-91) 556-6868 Helsinki, Finland Tel: (358-9) 638-122 Fax: (358-9) 638-611

ASIA & OCEANIA
Singapore* Tel: (65) 6221-3055 Fax: (65) 6223-5850 Sydney, Australia Tel: (61-2) 9264-5199 Fax: (61-2) 9264-5299 Melbourne, Australia Tel: (61-3) 9699-3833 Fax: (61-3) 9699-3811 Tokyo, Japan* Tel: (81-3) 3214-6951 Fax: (81-3) 3214-6950 Osaka, Japan Tel: (81-6) 6262-3831 Fax: (81-6) 6262-4607 Nagoya, Japan Tel: (81-52) 561-3936 Fax: (81-52) 561-3945 Fukuoka, Japan Tel: (81-92) 473-2005, 6 Fax: (81-92) 473-2007 Beijing, China Tel: (86-10) 6410-6162 Fax: (86-10) 6505-2310 Shanghai, China* Tel: (86-21) 5108-8771, 2 Fax: (86-21) 6219-6015 Guangzhou, China Tel: (86-20) 8334-0052 Fax: (86-20) 8335-1142 Qingdao, China Tel: (86-532) 8388-7931, 4 Fax: (86-532) 8388-7935 Hong Kong, China Tel: (852) 2545-9500 Fax: (852) 2815-0487 Taipei, Taiwan Tel: (886-2) 2725-2324 Fax: (886-2) 2757-7240 Kuala Lumpur, Malaysia Tel: (60-3) 2117-7100 Fax: (60-3) 2142-2107

MIDDLE EAST
Dubai, United Arab Emirates* Tel: (971-4) 332-7776 Fax: (971-4) 329-1300 Regional headquarters

English

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