Gwangju Employers Federation Calls for Policies to Reshore Home Appliance Factories to Korea

Calls for Support in Facility Relocation, Financial and Tax Benefits

The Gwangju Employers Federation has called for policies to encourage the reshoring of home appliance and electronics manufacturing, which is currently produced in overseas factories, in order to stimulate the stagnant domestic market and create jobs.

On July 7, the Gwangju Employers Federation released a press statement saying, "As a prerequisite for reshoring overseas factories, production bases in countries such as China and Vietnam should be relocated to Korea, focusing on the assembly and manufacturing of small and medium-sized home appliances such as washing machines, refrigerators, vacuum cleaners, rice cookers, electric fans, electric heaters, and air purifiers." The federation added, "Mid-sized and small businesses with strong brand recognition should be the main targets, and if necessary, separate incentives should be provided for large corporations."

The Gwangju Employers Federation proposed a specialized reshoring incentive policy for the home appliance sector, including: support for facility investment and relocation; securing domestic sites and providing basic infrastructure; incentives for employment and workforce training; financial, funding, and tax benefits; and support for marketing, distribution, and brand strengthening.

The federation explained, "For facility investment and relocation, up to 50% of the costs for dismantling overseas factories, exporting equipment, and reinstalling should be subsidized through direct support for factory relocation costs. For reshoring investments in specialized home appliance equipment, tax credits and other benefits should be provided." "Regarding securing domestic sites·and providing basic infrastructure, when attracting companies to existing home appliance clusters, priority occupancy rights should be offered, and when moving into industrial complexes, a 30-40% discount on land prices or long-term, interest-free installment payments should be allowed."

The federation continued, "There should be preferential loans for purchasing materials, parts, and equipment, and for essential parts procurement for production, loans with interest rates below 2% should be provided, requiring up to 5 billion KRW." It added, "By granting a 'reshoring certification mark,' marketing support linked to distribution channels, reduced entry fees for domestic home shopping and online malls to help develop domestic sales channels,·and designation as a priority target for public institution purchases should all be implemented."

Additionally, the federation stated, "To revitalize the regional economy and domestic demand, it would be more effective to include the reshoring of mid-sized and small partner companies that cooperate with large corporations." The federation added, "Authorities should consider forming an 'Overseas Factory Reshoring Task Force' that includes economic organizations to find alternatives that can help local small and medium-sized enterprises survive."