Korea has made great strides toward recovery since the onset of the financial crisis in December, 1997. After stabilizing its foreign exchange reserves, the Korean Government (ROKG) then set a comprehensive strategy to restructure almost every sector of the economy, with priority placed first on swift and prudent reform of the financial and corporate sectors. As a result of ongoing restructuring efforts and supporting economic policy re-adjustments, analysts are hopeful that the Korean economy will grow by about two percent year-over-year in 1999. To stimulate the domestic engineering and construction industries, the ROKG will lift in 1999 various regulations or institutional barriers. For environmental projects, Korean engineering and construction companies are in cutthroat competition to win government procurement projects, especially for large-scale work such as construction of recycling plants, sewage treatment plants and municipal solid waste incineration plants. Of additional interest to U.S. exporters, is the fact that, as the Korean conglomerates (chaebols) restructure and re-focus, technology transfer, especially from the U.S., will be extremely important. Domestic environmental companies will continue to need the latest technology, much of which can come from the U.S., in order to move up the value-added chain.
According to the Ministry of Environment (MOE), ROKG environmental policy in 1999 will focus on lake and river clean-up, improvement in air quality, reduction of solid waste, and recycling. The ROKG intends to revitalize and support these niche sectors to form a future “strategic industry” for meeting the challenges of “green round” and climate change issues. MOE also has hinted that the ROKG will offer incentives to promote private investment for wastewater treatment plants, incineration plants, and landfill sites. For private investment using foreign capital, the ROKG plans to further ease foreign investment regulations to improve the overall business climate in Korea and raise the nation’s market liberalization level to that of advanced countries.
Among small and medium-sized enterprises severely affected by the nation’s credit crunch, the credit squeeze has dealt a particularly severe blow to local engineering and construction industries. The Korean government announced it will expand credit guarantees through the injection of 1.3 trillion won (USD 1.1 billion at W 1,200 = 1 USD)from the IBRD (International Bank for Reconstruction and Development) and 1.2 trillion won (USD 1 billion) from the country’s 1999 budget. The ROKG also plans to take other measures in order to stimulate consumption and investment. These include: activation of consumer financing through interest rate cuts; provision of tax incentives; and the encouragement of investment in knowledge-based venture businesses including environmental technology. The ROKG also has announced it intends to eliminate various regulations which now handcuff employment and business opportunities through massive deregulation efforts.
Currently, Korea is undertaking a mammoth wastewater treatment program to improve the nation’s water quality including lake and major river clean-up. According to MOE’s middle and long term planning team for the so-called “four major river clean-up project” encompassing the Han River, the Nakdong River, the Kum River and the Youngsan River, Korea is planning to invest W 12,304 billion (USD 10 billion at W 1,200 = 1 USD) to improve water quality by 2005. Cost details for this “four major river project” follow below:
· For the Han River: W 3,391 billion (USD 2.8 billion at W 1,200 = 1 USD);
· For the Nakdong River: W 3,689 billion (USD 3.1 billion);
· For the Youngsan River: W 1,931 billion (USD 1.6 billion); and
· For the Kum River: W 1,295 billion (USD 1 billion).
Construction of advanced treatment facilities at existing sewage treatment plants for the four major rivers and their tributaries: W 1,998 billion (USD 1.67 billion).
According to MOE sources, in the planning and budget divisions, in spite of the country’s economic difficulties and budget retrenchment, the Ministry’s 1999 budget for environmental projects did not see a reduction year-over-year. The total budget for MOE’s environmental projects stands at W 1,153 billion (USD 960 million at W 1,200 = 1 USD). Details of important aspects of MOE projects include:
· Construction and management of water treatment facilities: 241 billion (USD 200 million at W 1,200 = 1 USD);
· Management of sewage treatment facilities and water preservation: W 356 billion (USD 300 million);
· Management and construction of waste treatment facilities: W 270 billion (USD 200 million);
· Environmental technology development: W 113 billion (USD 90 million);
· Improvement of air quality: W 1 billion (USD 0.8 million); and
· Management of eco-system: W 11 billion (USD 9.2 million).
In another sector, Korea’s waste recycling market also offers great opportunities for U.S. exporters since the country is characterized by an excessive “materialized” (material-dependent) industrial structure. The ROKG now recognizes that there are many benefits to waste recycling. First, by collecting more recyclable items, the environment improves. Second, the nation’s balance of payments can be “greened” through the use of more domestically recycled materials. Of equal importance, active recycling can provide both temporary and permanent jobs for the unemployed who have fallen victim to current economic difficulties. Therefore, the ROKG plans to stimulate its recycling industry to help the nation overcome the current recession. This plan will have an effect on the potential marketability of many U.S. export products including balers, separators, shredders, compactors, composting technologies for food waste, waste electric appliance recycling and energy recovery from waste oil.
Through new MOE regulations, the ROKG has strengthened permissible emission levels of air and water pollution around major cities and industrial facilities, and this sector holds additional promise for U.S. exporters. To meet progressively more stringent ROKG goals, Pohang Iron & Steel Co. (POSCO), the second largest steel maker in the world, has installed or constructed over the last ten years, more than 800 new pieces of air pollution control equipment, 146 water and waste water treatment facilities, five incinerators, and two landfill sites at its various manufacturing facilities. POSCO plans to invest a total of 590.8 billion won (USD 498 million at W 1,200 = 1USD), at an annual average of 70 –80 billion won (USD 58 million – USD 67 million), for improvement of the environmental sector by 2005. POSCO will invest a total of 111 billion won (USD 92.5 million) this year alone, including 46.1 billion won (USD 38.3 million) for waste treatment and disposal, 47.5 billion won (USD 39.5 million) in air pollution control projects, and 17.4 billion won (USD 14.5 million) in water quality improvement. POSCO plans to improve its recycling ratio of slags and sludges from 80 percent in 1997 to 90 percent this year, and the giant steel maker will increase its recycling ratio for all its waste to more than 95 percent by 2000. Details about POSCO’s environmental projects are as follows:
· Installation of desulfurization facility at the No. 1 and No. 3 coke plants at the Pohang plant;
· Installation of nitrogen oxide(NOx) removal facility for all smelting processes at the Pohang plant;
· Installation of roof dust catcher and improvement of electrostatic precipitator at the No. 1 steel-making plant at the Kwangyang plant.
· Renovation of waste water treatment facilities at the coke plants at the Pohang plant;
· Final waste water recycling facility at the Pohang plant;
· Installation of waste water re-use facilities for zero final waste water at the Kwangyang plant.
· Installation of a new incinerator at the Pohang plant;
· Installation of dust de-zinc facilities at the Kwangyang plant;
· Construction of a solidification treatment plant for safety landfill at the Kwangyang plant.
The Korean environmental market is expanding annually, and in spite of Korea’s current difficulties, the ROKG has publicly stated it will continue to invest in the nation’s environmental clean-up and protection. To help U.S. environmental exporters capitalize on these market opportunities, CS Korea and the U.S.-Asia Environmental Partnership (U.S.-AEP)/Korea will organize a U.S. Pavilion June 11-14 at the International Exhibition on Environmental Technologies (ENVEX) ’99, which is the biggest environmental trade show in Korea. U.S. exhibitors at ENVEX ’98 demonstrated the strong potential of American manufacturers using cutting-edge technology. Therefore, CS Korea and U.S.-AEP/Korea believe a U.S. Pavilion in 1999, spotlighting leading U.S. firms with advanced technologies in the field of environmental products and services, will attract great interest from Korean buyers. We will showcase all U.S. sponsors, advertisers, and exhibitors under this American promotional umbrella to maximize exposure among Korean decision-makers. U.S.-AEP/Korea has established long-standing positive relationships with many private industry, public institution, and government representatives, and expect U.S. exhibitors will achieve their Korean marketing goals by participating in our pavilion. U.S. companies interested in learning more about export opportunities in the Korean market exhibiting through the U.S. Pavilion at ENVEX ’99 are encouraged to contact U.S.-AEP/Korea for more information: