Governor Kim Youngrok Visits Yeosu Petrochemical Industry Site

Communication with SMEs... Discussing Strategies to Overcome the Crisis

Jeollanamdo Governor Kim Youngrok attended the 'Yeosu Petrochemical Small and Medium Enterprise On-site Communication Meeting' at Coins Co., Ltd. located in Yulchon Industrial Complex, Yeosu, on the 2nd, and is taking a commemorative photo. Provided by Jeonnam Province

On June 2, Jeollanamdo Governor Kim Youngrok visited Coins Co., Ltd. in the Yulchon Industrial Complex in Yeosu, where he held an on-site communication meeting with representatives of small and medium-sized petrochemical enterprises. During the meeting, he listened directly to the crisis facing local businesses in Yeosu and discussed possible institutional improvements to help overcome these challenges.

At the meeting, practical on-site opinions were collected to develop response measures, following Yeosu’s designation as a Preemptive Industrial Crisis Response Area on May 1.

The Yeosu National Industrial Complex is a core production base for South Korea’s petrochemical industry. It accounts for more than one-third of the nation’s petrochemical production and plays a pivotal role in the regional economy and employment.

However, a combination of ongoing crisis factors?including international oil price instability, the spread of low-priced Chinese products, a slowdown in exports, and high interest rates?has led to a worsening structural crisis, particularly for small and medium-sized enterprises. These companies are facing declining sales, reduced facility investment, and employment instability.

Reflecting these circumstances, Jeollanamdo applied to the government in March for the designation of a Preemptive Industrial Crisis Response Area. Recognizing the severity of the structural crisis in Yeosu’s petrochemical industry, the government designated Yeosu as such an area on May 1.

During the meeting, SME representatives emphasized, “Aging facilities and the burden of high-interest financing are serious issues, and securing skilled workers is also very challenging. More effective support and institutional backing are urgently needed.”

Even before the government’s designation, Jeollanamdo proactively responded to the crisis by urgently allocating 3 billion won in reserve funds to support safety equipment, the employer’s share of the four major social insurances, and mandatory legal training expenses.

Going forward, Jeollanamdo plans to include a 15 billion won customized support package in the national main budget, covering SME loan support, workforce training, and technology development. The province also intends to provide institutional support for industry-wide structural improvements through the enactment of the Special Act on the Petrochemical Industry.

Additionally, Jeollanamdo is working closely with the government to ensure that the Yeosu area is designated as an Employment Crisis Area as soon as possible.

Governor Kim Youngrok stated, “Both large corporations and SMEs in the Yeosu petrochemical complex are facing a severe crisis. Since the designation as a Special Industrial Crisis Response Area on May 1, the government’s practical support has been insufficient. Immediate financial support, such as low-interest policy funds, is urgently needed, and institutional improvements are also required to ease the burden of electricity costs.”

He added, “We are working to enact a Special Support Act for the Petrochemical Industry, and we will make every effort to secure support of over 370 billion won, up to as much as 1 trillion won, through the government’s supplementary budget and next year’s main budget.”