9 out of 10 Companies Adopted 'New Industry Entry' Type in November Last Year
Discussion on Measures to Revitalize Business Restructuring for Post-COVID Preparation
[Asia Economy Reporter Moon Chaeseok] On the 24th, the government approved the plans of 10 companies, including those attempting to restructure their businesses from internal combustion engine vehicles to hydrogen and electric vehicles.
The Ministry of Trade, Industry and Energy finalized the approval of the business restructuring plans of 10 companies that passed the review of the '26th Business Restructuring Plan Deliberation Committee' on the same day.
The 10 companies are Sang-A Frontec, Inzi Controls, Deokyang Industry, Konek, J&TG, Saehan Industry, Vessel Aerospace, Jungwoo M-Tech, Shingwan Industry, and NFDA.
Among them, 9 companies were selected under the newly introduced 'New Industry Entry' category, which was established by the amendment of the Corporate Vitality Act implemented since November last year.
The cumulative number of companies approved under the Corporate Vitality Act has increased to 128, with 14 companies under the New Industry Entry category.
During the five-year business restructuring period, the 10 companies plan to newly hire about 1,000 employees and invest a total of 230 billion KRW for technology development or mass production of new products in new industry fields.
The 26th restructuring is characterized by the first attempt at a 'theme-based business restructuring' approach. The Ministry of Industry expects that when multiple companies within an ecosystem grouped under the same theme restructure their businesses simultaneously, the innovation ripple effect will be greater.
In this restructuring, the business restructuring of six automotive parts companies (four mid-sized companies and two small and medium enterprises) entering the eco-friendly vehicle industry ecosystem from internal combustion engine vehicles was approved collectively.
A total of six companies?two hydrogen fuel cell companies, one cooling control device company, one motor company, one battery company, and one chassis company?were approved under the 'Internal Combustion Engine Vehicles → Hydrogen & Electric Vehicles' theme.
For example, Sang-A Frontec is aggressively pursuing technology development and new investments to localize key components of hydrogen fuel cells (Stacks), which are currently entirely dependent on imports.
The Ministry of Industry designated the Korea Institute for Advancement of Technology (KIAT) as an additional dedicated agency for business restructuring in April, alongside the existing dedicated agency, the Korea Chamber of Commerce and Industry's Corporate Vitality Support Center. The 'Corporate Vitality Support Task Force (TF)' was also launched.
The Ministry plans to actively support the approved companies to grow into core suppliers of advanced parts in the global hydrogen and electric vehicle market (GVC).
Professor Lee, the private sector chairman, stated, "I hope that the innovation and structural transformation of the automotive parts industry, which has been struggling due to COVID-19, will spread more rapidly with the approval of the business restructuring theme as a signal."
An official from the Ministry of Industry said, "At a time of great transformation due to the spread of COVID-19, it is necessary to actively support proactive business restructuring to advance our key industries and create new opportunities," adding, "We will consult with related ministries to institutionalize improvement measures for revitalizing business restructuring in the future."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
