Busan City Signs 'Busan Return Investment MOU' with Nova International Co., Ltd.
'World's Most Comfortable Shoes' to be Produced in Busan R&D Special Zone
Closure of Vietnam Factory and Establishment of Eco-Friendly Shoe Factory in Gangseo-gu
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[Asia Economy Yeongnam Reporting Headquarters Reporter Kim Yong-woo] A global eco-friendly shoe manufacturing technology company is making a 'U-turn' from Vietnam back to its production base in Busan.
On the 14th at 2 p.m., Busan City will hold a signing ceremony for a Memorandum of Understanding (MOU) for the return investment of Nova International Co., Ltd. to Busan at the 7th floor video conference room of City Hall, attended by Acting Mayor Byeon Seong-wan, CEO Lee Hyo of Nova International Co., Ltd., and executives.
Through this agreement, Nova International Co., Ltd. plans to invest more than 23 billion KRW to establish its headquarters, R&D center, and production plant for eco-friendly shoe manufacturing and technology research in the Gangseo-gu Research and Development Special Zone.
They also plan to hire a total of 163 new employees and export more than 95% of their production volume.
Founded in 1994 in Sasang-gu, Busan, Nova International Co., Ltd. is a small and medium-sized enterprise that produces finished shoes and shoe components such as laces and insoles through an Original Equipment Manufacturer (OEM) method.
The company exclusively supplies Merino wool material shoes to Allbirds, which was named by TIME magazine as selling the "world’s most comfortable shoe."
Allbirds, established in 2015 in San Francisco, USA, is an eco-friendly shoe sales company valued at 1.4 billion USD (approximately 1.7 trillion KRW), known as a unicorn company in the US and often called the Apple of the shoe industry.
The shoe industry is a representative key industry of Busan, with 45% of domestic shoe companies located there. It significantly impacts the regional economy but has recently faced difficulties due to the global supply chain collapse and consumption downturn accelerated by COVID-19.
Nova International Co., Ltd. collaborated with domestic suppliers to develop Korea’s first eco-friendly wool fabric weaving technology, successfully achieving 100% localization of wool fabric, which had previously been entirely imported. By establishing a new domestic supply chain, Nova International is leading a new paradigm in the shoe industry with eco-friendly material shoes.
With raw material supply now possible, smart production facilities, and a domestic production environment established utilizing the 'Made in Korea' brand, Nova International has hoped to return its production facilities from Vietnam to Busan.
Busan City responded to the difficulties in deciding on the return investment, such as large-scale capital input and securing production sites. The city convened an emergency economic meeting and improved the 'U-turn Company Support Measures.'
Busan City significantly expanded subsidies for U-turn companies through amendments to the Investment Promotion Fund Ordinance (from a maximum of 1.5 billion KRW to 30 billion KRW) and induced Nova International’s return to Busan by supplying land within the Research and Development Special Zone using the 'Special Exception System for Relaxing Entry Restrictions through Advanced Technology and Product Certification.'
This is the first case where Busan City and the Research and Development Special Zone Promotion Foundation actively pursued regulatory exceptions to bring overseas production facilities back to Korea.
Acting Mayor Byeon Seong-wan of Busan said, “In a reality where most shoe companies are relocating factories overseas, establishing a 100% domestic production system and reshoring production bases from abroad to Korea will serve as a model case of reshoring.”
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