[Report] Over 50% Tax Benefits for 5 Years 'Wings'... Saemangeum Becomes the Forward Base for Secondary Batteries

Saemangeum Authority "Efforts to Complete the Secondary Battery Industry Value Chain"
Designated as Investment Promotion Zone in July... Benefits Including Corporate Tax Reduction
Creating a 'Smart Waterfront City' Surpassing Amsterdam

"We are working to attract large companies that will complete the secondary battery industry value chain in Saemangeum by producing the final product 'pack'." (Kim Gyu-hyun, Administrator of Saemangeum Development Agency)

Sunlight has come to Saemangeum. With the Saemangeum project reflected in the current government's national agenda, it has achieved investment attraction results of 4.2 trillion KRW over one year since its launch in May last year. This is about three times more than the 1.5 trillion KRW achieved over nine years since the Saemangeum Development Agency opened in September 2013.

The designation of the International Investment Promotion Zone scheduled for July is expected to add momentum. This is because tax benefits such as 100% exemption of corporate tax and income tax for three years plus 50% exemption for two years will be provided.

◆Permits, Tax Benefits, and Expandability... Secondary Battery Companies Head to Saemangeum

When visiting Saemangeum on the 31st of last month, much of the land was still empty. Some areas were undergoing reclamation. Nevertheless, the Saemangeum Development Agency reported that they are feeling higher popularity than ever before. The number of companies wishing to move into the national industrial complex is increasing.

In particular, as secondary battery companies are flocking in one after another, a cluster is being formed. According to the Saemangeum Development Agency, a total of 21 secondary battery companies have moved in (including those scheduled to move in) so far.

Administrator Kim Gyu-hyun said, "The sustainability of the secondary battery market's growth hinges on 2025 as an inflection point. It will be difficult unless many factories are built and infrastructure is established before then to secure a global market share." He added, "Even after the validity period (5 years) of the tax benefits under the International Investment Promotion Zone designation ends, if deemed necessary, we plan to negotiate with financial authorities for an extension."

EpiCamtec has stepped into District 1 of the national industrial complex. The investment amount is 120 billion KRW, and they purchased a site of 32,500㎡ within District 1. Lee Sung-kwon, CEO of EpiCamtec, said, "We decided to invest to increase production of electrolytes, a core material of secondary batteries," adding, "There were no issues with permits or facilities such as electricity, so we were able to move in quickly."

He said that although he looked around areas such as Eumseong-gun in Chungbuk where the headquarters is located, Gumi and other Gyeongsang-do regions, and Incheon, he could not find a place as satisfactory as Saemangeum. CEO Lee elaborated, "The tax benefits were significant, but Saemangeum was the most suitable in terms of 'expandability.'"

There are also challenges. One is the outflow of manpower caused by inadequate residential conditions. There is only one apartment near the industrial complex, and there are few recreational facilities, so it is reported that some young unmarried employees leave.

Administrator Kim said, "Once the Saemangeum-Jeonju Expressway, scheduled to be completed next year, opens, travel within 30 minutes will be possible, and we plan to operate commuter buses with the budget secured." He added, "Local governments need to show much interest regarding transportation around the industrial complex."

◆Residential Infrastructure Such as North-South Road and Smart Waterfront City Also Progressing Smoothly

The Saemangeum North-South Road scheduled to open in July / Photo by Noh Kyung-jo

In July, the unopened section of the North-South Road in Saemangeum will also be opened. The North-South Road connecting Baekryeon-ri, Haseo-myeon, Buan-gun, Jeonbuk, and Osikdo-dong, Gunsan-si (27.1 km) is a six-lane road that functions as a main artery connecting Saemangeum industrial research land, complex development land, and tourism leisure land.

The site was in the final stages of construction, and at the intersection with the East-West Road, there was a 'reverse arch bridge.' Considering the height restrictions of the Saemangeum New Airport, the arch shape, which curves upward, was inverted.

The East-West Road, opened in 2020, connects to the Saemangeum New Port, and the reclamation work for the smart waterfront city development in the area is nearing completion. The goal is to have the first residents move in by 2027, with a residential population of 25,000 (10,000 households).

Kang Byung-jae, President of Saemangeum Development Corporation, explained, "If the sale price includes reinvestment of development profits, it becomes too expensive. We will set prices considering nearby areas sufficiently." He added, "If the number of companies moving into the industrial complex increases explosively and the tourism complex is developed, it may be necessary to revise urban functions."

Also, when thinking of a waterfront city, Amsterdam in the Netherlands usually comes to mind, but the plan is to develop it more advanced than that. Administrator Kim said, "We are considering specialized fields worthy of the name 'smart.'" He added, "Applying everything such as transportation and robotics makes the construction cost very high, so we are finding an appropriate balance."

Meanwhile, Saemangeum development is a national project with a total budget of 22 trillion KRW. The area combining the land inside the Saemangeum seawall and the freshwater lake is 409 km², about two-thirds the size of Seoul (605 km²). The project is being carried out in four phases, with the first phase completed in 2020. From the second phase, it will proceed on a 10-year cycle and is expected to be completed by 2050.