[Planning] ② Promotion of the 'Economic Development Plan' and the Launch of the 'Cement Association'

History of the Cement Industry in Korea

Former President Park Chung-hee and Hong Jae-sun, Chairman of Ssangyong Cement, inspecting the Ssangyong Cement Donghae Plant (Chairman Hong is to the right of President Park).
[Photo by Korea Cement Association]

[Asia Economy Reporter Kim Jong-hwa]South Korea is the 12th largest cement-producing country in the world, with an annual production scale of over 60 million tons. In terms of cement technology, it has been recognized as an advanced cement nation since the 1980s, exporting production technology overseas. However, the public is not fully aware of the status of South Korea's cement industry. Although it played a key role as a national infrastructure industry during the economic development period of the 1960s and 1970s, it became stigmatized as a polluting industry damaging the environment in the 2000s, causing it to fall out of public interest. Recently, the cement industry is undergoing a transition to an eco-friendly industry. This publication reexamines the history of South Korea's cement industry, which is transforming from an ugly duckling into a swan, over 10 installments.[Editor's Note]

The domestic cement industry rapidly grew in the 1960s, driven by economic development policies. As the government’s industrialization policies progressed, investments in social overhead capital such as railroads, power facilities, ports, rivers, bridges, and hydraulic facilities advanced rapidly.

Among the 'First Five-Year Economic Development Plan' officially announced by the Economic Planning Board on January 13, 1962, the main goal for the cement sector was to establish and expand cement plants to increase annual production from 650,000 tons in the base year to 1.37 million tons in the target year, exceeding the expected domestic demand of 1.2 million tons.

Former President Park Chung-hee signed the first cement produced by Ssangyong Cement.
[Photo by Korea Cement Association]

This economic development policy was a groundbreaking challenge under the economic conditions of South Korea at the time, which faced various difficulties. Cement, along with rebar and lumber, was a fundamental material for industrial construction, but the production capacity of the existing Dongyang Cement and Daehan Cement was insufficient to meet the annually increasing demand.

As a result, the import dependency on cement rose from 11.1% in 1960 to 26.2% in 1963. Considering this, the government actively promoted the construction and expansion of cement plants alongside the economic development plan. In addition to expanding the production facilities of Dongyang Cement and Daehan Cement, new companies such as Ssangyong Cement, Hanil, Hyundai, Seongsin Cement, and Union entered the cement industry.

From this point, South Korea’s annual cement production exceeded 1 million tons, and supply finally surpassed demand. Furthermore, by exporting cement to Vietnam for the first time in 1964, South Korea’s technological capabilities gained international recognition.

On July 1, 1963, the Korea Cement Industry Association was established, firmly positioning the domestic cement industry as a national infrastructure industry and enabling its growth. The Korea Cement Industry Association is the predecessor of the current 'Korea Cement Association.'

To grow the cement industry in line with national economic development, a unifying center for the industry was needed. Five companies?Dongyang Cement, Daehan Cement (which was merged into Ssangyong Cement in 1975), Ssangyong Cement, Hanil Cement, and Hyundai Cement?agreed on this. Representatives of these five companies launched the association to contribute to the national economy by enhancing member companies’ rights and friendship, meeting domestic demand, and expanding into overseas markets through dialogue among industry partners.

The five founders who launched the Korea Cement Association's predecessor, the Korea Cement Industry Association. From the left in the photo: Lee Yang-gu, Chairman of Dongyang Cement (Chairman of Dongyang Group), Lee Jeong-rim, Chairman of Daehan Cement (Chairman of the Federation of Korean Industries), Hong Jae-seon, Chairman of Ssangyong Cement, Heo Chae-gyeong, Chairman of Hanil Cement, and Chung Ju-yung, Chairman of Hyundai Cement (Chairman of Hyundai Group).

The 1970s can be described as a decade of leap forward, overcoming challenges through determination despite difficult domestic and international conditions, achieving remarkable national power growth. The global economic recession and downturn caused by the first and second oil shocks, and domestic and international instability such as the aftermath of the October 26 Incident in 1979, placed the country in a very difficult situation.

However, by vigorously pursuing the economic development plans steadily implemented since the 1960s, South Korea escaped long-term poverty and improved its international balance of payments, laying the foundation for a self-reliant economy. In 1978, the country entered the era of a per capita income of $1,000.

Although economic growth sharply slowed in 1979 and the beginning of the 1980s was not very bright, the remarkable growth achieved throughout the 1970s astonished the world.

An official from the Korea Cement Association said, "Investment in social overhead capital was fully underway due to the economic development policies started in the 1960s, and with the establishment of the Korea Cement Industry Association, the predecessor of the Korea Cement Association, the cement industry entered a path of development," adding, "The modernization and industrialization process of South Korea has progressed in parallel with the development of the cement industry."