A 3.6 Billion State Loan Transformed the Industry... Automated and Resource-Efficient Slaughterhouses [FTA Changing Agriculture] ⑤

Busan-Gyeongnam and Daejeon-Chungnam Livestock Markets
Government Loan Support Drives Improvements in Productivity, Hygiene, and Environment
Visible Results in Automation and Resource Utilization

The government's domestic support measures for FTAs (Free Trade Agreements) have led to structural improvements in slaughter and processing facilities. The Integrated Pukyong Livestock Products Market of the Pukyong Pig Farming Cooperative Association, a key hub for the Busan and Gyeongnam regions, and the Porkville Livestock Market under the Daejeon Chungnam Pig Farmers' Cooperative in the Daejeon and Chungnam regions, have both enhanced productivity, hygiene, and environmental outcomes through facility modernization. These sites are now regarded as proven examples of strengthening the competitiveness of domestic livestock products. In an environment where competition with imported livestock products is inevitable, the evolving role of these markets-from simple slaughterhouses to infrastructure that guarantees quality and trust-carries significant meaning.

Pukyong Livestock Products Market: Scaling Up Through Automation and Resource Utilization

The transformation of the Pukyong Livestock Products Market began in earnest with government support. In 2023, the market secured 3.6 billion won in government loans through a support program for slaughter and processing companies, channeling these funds into the comprehensive modernization of slaughter and processing facilities. Key investments such as expanding the lairage, introducing automated transfer equipment, and improving hygiene and ventilation systems were implemented in stages. These efforts marked the starting point for large-scale structural improvements that would have been difficult to achieve with only internal funding. According to the market, "Given the high upfront costs of slaughterhouse facilities, without loan support, the pace of improvement would have been much slower. In practice, the FTA support measures served as a catalyst for structural transformation on the ground."

The direction of facility improvements focused on advanced process automation and strengthening HACCP (Hazard Analysis and Critical Control Points)-based hygiene management. The lairage was expanded and livestock movement routes were reorganized to reduce dependence on manual labor, while standardizing slaughter processes minimized discrepancies caused by varying worker skill levels. Long-standing issues raised by shipping farms-such as prolonged waiting times, congestion in the lairage, and odor complaints-were largely resolved through equipment reconfiguration and process distribution. As bottlenecks that used to occur during peak periods were reduced, indirect cost savings from improved work efficiency also became evident.

An official at the market stated, "In the past, surges in volume would directly translate into quality control risks, but now, with better facilities, the workflow has stabilized considerably. The slaughterhouse has shifted from a 'status quo structure' to a 'management-centered structure.'"

Panoramic view of the Integrated Pukyong Livestock Products Market of Pukyong Pig Farming Cooperative Association Photo by Nonghyup Central Association

The level of hygiene management has also been elevated. The market expanded both high- and low-temperature sterilization equipment and sanitary washing lines, and introduced structural measures to prevent cross-contamination, establishing a system for proactive risk management throughout the slaughter process. Repetitive processes were replaced with automated trimming and transfer equipment to ensure uniform quality, reduce worker fatigue, and enhance process stability. Improvements to exhaust, ventilation, and wastewater treatment facilities not only enhanced the work environment but also reduced odors, alleviating the environmental management burden.

These changes are also reflected in the numbers. Since the facility improvements, the number of cattle slaughtered at the Pukyong Livestock Products Market increased by 87.7%, while pig slaughter volume rose by 53%. The key point is not just the increase in volume, but that the introduction of automated equipment has allowed a stable expansion of processing capacity per unit time, significantly reducing the bottlenecks that previously occurred. Even as volumes increased, the ability to maintain consistent line speeds reduced quality variation and the likelihood of rework, resulting in lower management costs per slaughtered animal.

A field worker commented, "As reliance on manual processes has decreased, quality variation has become noticeably smaller. The biggest change is that, even with increased volume, there is no longer a need to rush through processing as before."

The improvement in operational efficiency due to higher utilization rates is also noteworthy. The utilization rate for cattle slaughter rose from 45.5% to 53.4%. As utilization increased, fixed costs such as depreciation and maintenance were spread over more units, improving the cost structure, and utility costs for electricity, water, and gas also became more efficient due to economies of scale.

Environmental performance is another significant change at the Pukyong Livestock Products Market. The resource recovery rate for by-products and waste generated during slaughter has reached 99%. This was achieved by improving the waste sorting and collection system from the early stages of processing and significantly enhancing the capacity and efficiency of the rendering process (the conversion of slaughter by-products into reusable resources through heat and pressure). By expanding the capacity of rendering equipment, the market established a foundation to process all waste generated from increased slaughter volumes, minimizing process losses and recovering most of the input waste as resources. The reduction in costs for outsourcing waste treatment is an additional benefit.

Exterior view of Daejeon Chungnam Pig Farmers' Cooperative Porkville Livestock Market. Photo by Nonghyup Central Association

Porkville Livestock Market: A Model for Stabilizing Farm Management and Enhancing Quality

Alongside the Pukyong Livestock Products Market, the Porkville Livestock Market in the Daejeon and Chungnam regions is cited as another field case of FTA domestic support measures. Porkville Livestock Market received a total of 4.3 billion won in loan support, which was used for operating funds, raw meat purchases, and the renovation of slaughter and processing facilities. Of this, about 3.2 billion won was allocated to member farms for operating and raw meat purchasing funds, easing their financial burden, while about 1.1 billion won was invested in the renovation of slaughter, processing, cooling, and hygiene facilities, serving as a foundational investment to maintain stable quality and hygiene standards.

Porkville Livestock Market has benchmarked advanced overseas slaughterhouses, such as those in Denmark, but instead of importing equipment wholesale, has adapted processes to suit domestic working conditions and quality demands. By repeatedly refining worker movement and process connectivity, the market established a system for stable management of carcass quality and freshness, with cumulative improvements reflected in quality indicators.

The results are evident in the metrics. The number of cattle slaughtered at Porkville Livestock Market increased by 24%, and the pig slaughter utilization rate rose from 88% to 94%. The introduction of rapid-freezing and pre-cooling tunnels reduced drip loss from carcasses, enabling more stable management of key quality factors such as meat color and water-holding capacity. The expansion of automated equipment also contributed to reducing work intensity and the risk of industrial accidents.

Exterior view of Daejeon Chungnam Pig Farmers' Cooperative Porkville Livestock Market. Photo by Nonghyup Central Association

An official at Porkville Livestock Market explained, "Automation is not a means to replace manpower, but a device to handle increasing volumes stably while reducing the burden on workers. The structure now allows for the deployment of an appropriate number of personnel according to line speed and process characteristics."

Changes have also continued on the environmental front. Porkville Livestock Market processes by-products and waste generated by increased slaughter volumes through consignment methods, raising the recycling rate. Although the market does not directly produce compost, the connection of waste to resource recovery processes such as composting has ultimately led to increased production of organic fertilizers. The fact that slaughter volume expansion and environmental management can be achieved simultaneously is a meaningful change.

These markets are not simply processing facilities, but core infrastructure supporting the quality and safety of domestic livestock products. As competition with imported meat intensifies, securing competitiveness in fresh meat through automation and stricter hygiene and environmental standards becomes the front line of defense for the domestic livestock industry. Field experts agree that loan-based support has clearly acted as a catalyst for facility improvements, but also point out that, in an environment of high interest rates and rising energy prices, the repayment burden could increase.

An official at the Pukyong Livestock Products Market stated, "The competitiveness of slaughterhouses is directly linked to the competitiveness of domestic livestock products. With continued facility improvements and institutional support, we can sufficiently compete with imported meat."

Production Support: Ministry of Agriculture, Food and Rural Affairs · Korea Rural Economic Institute