Gyeongbuk Province and Pohang City Submit Application for Early Recovery from Typhoon Damage ... Request for Designation as 'Preemptive Response Area for Industrial Crisis'

Steel Industry Crisis and Economic Blow: Voluntary Recovery Impossible, National Support Urgently Needed

Overcoming the Steel Crisis... Significant Aid to Related Industries and National Economy, Prompt Designation Requested

Pohang City Hall.

[Asia Economy Yeongnam Reporting Headquarters Reporter Dongguk Lee] Pohang City, Gyeongbuk Province, submitted an application for designation as an ‘Industrial Crisis Preemptive Response Area’ to the Ministry of Trade, Industry and Energy on the 23rd, appealing for government support to revive Pohang’s steel industry, which is facing its greatest crisis due to Typhoon ‘Hinnamnor’.

On the 23rd, Pohang City and Gyeongbuk Province submitted the application along with their own plans related to typhoon damage recovery and support.

Through the application, the city requested 1.4 trillion KRW in government support for 27 projects across four areas, including overcoming the steel industry crisis, restoring and establishing infrastructure in the steel industrial complex, creating a green industrial complex, establishing a steel rebound fund, and building a digital-green complex cultural center.

On the day, Lee Young-seok, Director of Job Economy at Gyeongbuk Province, Lee Gyu-sam, Manager of Job Economy and Labor, and Son Jeong-ho, Director of Job Economy Bureau at Pohang City, explained the necessity to the Ministry of Trade, Industry and Energy and requested prompt designation.

Mayor Lee Kang-deok strongly urged the designation of the ‘Industrial Crisis Preemptive Response Area’ when Minister Lee Chang-yang of the Ministry of Trade, Industry and Energy visited the typhoon-damaged steel companies on the 8th.

The application stated that Pohang’s steel industry is facing a crisis with continuous declines in real gross regional domestic product (GRDP) and population due to fierce challenges from emerging countries such as China and India and the global economic downturn, and that Typhoon No. 11 ‘Hinnamnor’ dealt a direct blow to the Pohang Steel Industrial Complex, including POSCO and Hyundai Steel.

Due to this typhoon, more than 100 companies in the Pohang Steel Industrial Complex suffered massive damages estimated at 1.8 trillion KRW in provisional losses from flooding, building damage, and soil runoff, with recovery expected to require considerable time and costs.

Moreover, it is anticipated that it will take 3 to 6 months for major companies such as POSCO and Hyundai Steel, which are linked to these companies through product deliveries, to normalize operations, raising concerns about significant impacts not only on partner companies and small and medium enterprises but also on national related industries beyond the regional economy.

Accordingly, Pohang City and Gyeongbuk Province explained the reason for applying for designation as an industrial crisis preemptive response area, stating, “The crisis of Pohang’s steel industry is not only a problem for Pohang but should be recognized as a national issue because it greatly contributes to the revitalization of related domestic industries such as construction, automobile, shipbuilding, electrical electronics, assembled metals, and general machinery.”

They appealed for the urgent designation of the industrial crisis preemptive response area, emphasizing, “There is a need for extraordinary national-level support measures to overcome the severity of damage to steel companies caused by the typhoon and the steel crisis,” and requested support for various projects aimed at normalizing the steel industry.

Mayor Lee Kang-deok said, “The Pohang steel industry, which has a significant impact on the Korean economy, must be designated as an ‘Industrial Crisis Preemptive Response Area’ as soon as possible to overcome the current crisis and prepare national-level measures to overcome the regional industrial crisis,” adding, “We will do our best to prepare realistic support measures for companies in the region affected by the typhoon through cooperation with related organizations.”

The Industrial Crisis Preemptive Response Area is designated by the Minister of Trade, Industry and Energy based on the ‘Special Act on Regional Industrial Crisis Response and Regional Economic Recovery,’ enacted in August last year, when a significant deterioration of the region’s main industry is expected due to unexpected internal or external shocks.

According to the special act and enforcement decree, designation requirements include cases where large-scale disasters occur and when a special disaster area is declared under the ‘Framework Act on the Management of Disasters and Safety,’ requiring urgent response.

Pohang City, along with Gyeongju City, was declared a special disaster area on the 7th, meeting the requirements for designation as an ‘Industrial Crisis Preemptive Response Area.’

Once designated as an Industrial Crisis Preemptive Response Area, support can be received for ▲financial and fiscal support such as funds and loans ▲research and development support and commercialization of results ▲domestic sales, export support, and consulting related to management, technology, and accounting ▲education and training for employed workers and reemployment education for unemployed and retired workers.