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Bitgaram Energy Valley_IM


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Bitgaram Energy Valley_IM

  1. 1. 2016 Information Memorandum Future Global Energy Hub Bitgaram Energy Valley
  2. 2. CONTENTS Korea FDI EnvironmentI Bitgaram Energy Valley SchemeⅡ The EV Industry OverviewIII The Support Policies & Incentives for Foreign Investors Ⅳ Ⅲ
  3. 3. Korea - Optimal destination for FDI Bitgaram Energy Valley - Innovative Energy Hub of SW Korea Capital of Green Car(Electric Vehicle and Hydrogen-fueled electric vehicle) Manufacturing ▪ Stable economic structure and government’s will to promote energy industry compared to other OECD countries ▪ Legal system to support various forms of foreign investors ▪ Incentives and one-stop administrative support ▪ Bitgaram Innovation City, located in Naju, Jeollanam-do, is an industry hub that provides ecosystem for host power generation, renewable energy, relevant energy services, and diversified ICT industry ▪ Industry cluster to host energy-related industries – EV, ESS, HVDC, Smart Grid, and wind power ▪ KEPCO, one of the best global power generation companies by Forbes, and its subsidiaries (KEPCO KDN, KEPCO KPS) are also located in the Valley ▪ Industrial belt which connects KIA Motors (Gwangju), Daema Industrial Complex (Yeonggwang), and F1 Circuit (Yeongam) to host green car manufacturers ▪ EV Infrastructure for wind generation, ESS, HDVC, Smart Grid under construction ▪ China’s Jiurong Motor Company established EV manufacturing factory in Gwangju (annual capacity of 100K) Investment Highlights
  4. 4. Korea FDI EnvironmentI
  5. 5. Vietnam Mongolia Xian Taiyuan Japan Russia Taiwan Taipei Hong Kong Guangzhou Wuhan Nanjing Shanghai Beijing Harbin Vladivostok Khabarovs k Ulan Bator Tokyo Osaka “KOREA ” China Nagoya Korea is located in the center of Northeast Asia’s 61 cities & 2 billion population Average Growth Rate GDP Population Asia 4 bil. (the Worl d’s 2/3) 5.2% 2.7% 8.7% World AsiaOE CD Asia GDP U$ 12 tril. (the World’s 1/5) (unit: %) The World's Largest Market_the Center of Northeast Asia Korea is the Center of Northeast Asia including Japan and China, the attractive strategic point of market where closes to 2 billion population in 61 cities
  6. 6. • Overcame global economic crisis in 2008 rapidly – Shows highest CLI index among OECD nations and shows business recovery • Maintains stabilized national credit rating since 1998 – Moody’s raised credit rating by Aa2 in 12. 2015 – S&P raised credit rating by AA in 08. 2016 – Fitch will soon raise credit rating (Currently, the rate is in AA- since 08. 2013) • Provides various investment incentives – Offers Direct incentive such as tax exemption and cash support – Supports indirect incentives such as industrial site offers, finance or labor force support – Expands supportive conditions to help foreign companies investing in Korea – Differentiated incentives of local governments and of Bitgaram valley to foreign companies Various Support policies for Foreign Investors Stable Business Environment • Has Growth of high purchasing power – Shows World top 15 GDP scale and 5% of annual average in GDP growth • Is close by the large-scale market including Japan & China – Increase accessibility to world market through expansion of FTA • Plenty of blue-chip human resources • Established optimal distribution infra- structures – The world’s 2th international air cargo traffics at Inchon international airport – World top 5 container harbor; Busan • Built various industrial clusters Excellent Business Resources A Large-scale market Korea’s Positive Investment Conditions 1 2 43 Excellent Place to Invest Korea has many Positive Investment Conditions Korea has many positive investment conditions such as Stable Business Environments, a Large-scale market, various Support policies for Foreign Investors & Excellent Business Resources
  7. 7. Korea’s FTA Overview(As of Nov. 2016) Korea US Canada Mexico Chile Colombia EU EFTA India Singapore ASEAN Russia China Austra- lia New Zealand • Korea/China/Japan (3-way), RCEP, Israel, Central America Korea continues to expand the scope and opportunities of investment and economic trade through the conclusion of FTAs with major economic powers Under Negotiation In Effect Vietnam Peru Turkey Korea forms a large-scale market by expanding FTA The expansion of Korea’s recent FTAs is improving trades and investment conditions through trade scale expansion with the world’s large economic blocks • US, EU, ASEAN, EFTA, Singapore, Canada, Vietnam, China, India, Chile, Peru, Turkey, Australia, New Zealand, Columbia •GCC, Indonesia, Japan, Mexico, MERCOSUR, Malaysia, SACU Preparation
  8. 8. The CA Index 1) Comparison of Korea, China and Japan after Korea-US, Korea-EU FTA Korea’s auto industry earned more competitive edge against China and Japan after execution of Korea-EU FTA 1) CA: Comparative Advantage Korea China Japan Before After Before After Before After Chemical 0.30 0.30 0.02 0.02 0.03 0.03 Steel 2.01 2.25 0.30 0.38 0.92 0.99 Steel Products 2.28 2.93 1.61 1.49 1.16 1.13 Machinery 1.33 1.29 1.92 1.74 1.64 1.66 IT 2.20 1.42 1.65 1.72 1.03 0.93 Auto 2.42 2.66 0.28 0.27 3.76 3.30 Shipbuilding 10.01 28.17 1.54 0.53 1.42 1.53 Precision Instrument 0.81 0.59 0.75 0.76 1.84 1.66 Korea China Japan Before After Before After Before After Chemical 0.33 0.38 0.01 0.00 0.04 0.02 Steel 1.18 1.38 0.32 0.40 0.25 0.22 Steel Products 0.55 0.85 1.29 1.33 0.84 0.83 Machinery 0.92 1.12 1.74 1.91 2.23 2.53 IT 1.91 1.76 2.57 2.73 1.90 1.96 Auto 1.53 2.15 0.18 0.20 2.39 2.17 Shipbuilding 44.32 39.99 3.19 2.16 1.29 0.45 Precision Instrument 3.68 3.14 0.68 0.84 2.92 3.20 < CA Index of Korea/China/Japan in US Market before and after FTA came into effect> < CA Index of Korea/China/Japan in EU Market before and after FTA came into effect>
  9. 9. The Expected effect after Korea-China FTA in Effect Expectations of Korea-China FTA Long term economic benefit is expected two times greater than -US and -EU FTA • China takes accounts for 25% of exports and 17% of imports of Korea and expected to grow in the future • Tariffs reduction due to -China FTA is expected to reach US$5.44bn (US$0.93 for -US, US$0.38 for -EU) • China, the largest market globally, is considered to be a part of Korea’s domestic market due to FTA • 1) tariff abolition, 2) liberalized investments, and other positive effects expected for both nations Sector Key Implications Auto Parts • Long-term benefit expected despite selective concession and high degree of existing productions in China Renewable Energy • Solar energy: polysilicon, a base material of solar panel’s module, ingot, and wafer, will have positive impacts from FTA
  10. 10. 2,247 902 319 396 1,214 2,286 657 1,720 358 291 197 2,295 87 1,545 1,440 15,954 지역 1.23% (Unit: U$ Mil.) US Canada Cayman Islands Others Japan Singapore Hong Kong China OthersGermany En Gland Nether- land France Others America (24.22%) Asia (39.08%) EU (27.68%) 14.09% 5.65% 2.00% 2.48% 7.61% 14.33% 4.12% 10.78% 2.24% 1.82% 14.39% 0.55% 9.68% 100% Others 1) (9.02%) Others 9.02% Investment Results by countries(as of 2015) The investments to Korea by global corporates recorded U$ 15.9 billion as of 2015, the figures also including various companies from Europe Continuous investments to Korea by global corporates Regions
  11. 11. Bitgaram Energy Valley SchemeII
  12. 12. The Innovative Belt in the Southwest Region in Korea_ Bitgaram Energy Valley Bitgaram Energy Valley is an innovation belt connecting Gwangju Metropolitan City, Jeollanam-do, and Naju Innovation City, all located in the SW region of Korea. Gwangju Gwangju Metropolitan City ▪ Located at the center of Jeollanam-do ▪ Home of companies such as KIA motors, Kumho Tire ▪ 8,278 manufacturers (2014) ▪ Key exports: automobile, IT and home appliances, tire, semicon Naju Innovation City ▪Located in the south of Gwangju ▪Home of KEPCO HQ, KEPCO KDN, KEPCO KPS ▪ 105 companies to be located ▪ Key industry: power generation ∙ Naju Innovation City Beijing Seoul Jeollanam- do Busan ShanghaiJeollanam-do ▪ Key area in SW Korea with proximity to China, the largest market in NE Asia, and Japan ▪ Home of companies such as Hyundai Samho Heavy Industries, POSCO, 3M ▪ 11,885 manufacturers located as of 2014 ▪ Key exports: chemicals, oil & lubricants, and shipbuilding Osaka Tokyo Fukuoka
  13. 13. Gwangju & Jeonnam are equipped with differentiated regional infrastructure and economic conditions • Healthy labor relations as can be seen at KEPCO and KEPCO KPS • Labor Unions RegionalInfrastructure RegionalEconomicConditions • Supporting industrial cities and consumer base – Proximity to Gwangju and natural environment provide better residential, leisure, and industrial experiences Industrial support and consumer base • Ground & Maritime – Gwangyang International Container Port (1-hour, planned expansion from 12 ships to 33 ships) – Mokpo Shinoe Port (40-mins, planned expansion from 3 ships to 12 ships) – Muan International Airport (Jeju / 12 intl destinations including Shanghai, Beijing), Gwangju Airport, Yeosu Airport Trans- portation • Education – Jeonnam Science High School, foreign language high schools provide talent pool • Recreation – Naju Lake Tourist Region Infra- sturcture HR Labor Relation s Logistic s • Leading institutions such as GIST (global #2 in S&T research capacity), KIIT Gwangju Research Center, ETRI Optical Communications Center, KPTI, KETI, Jeonnam Univ (Korea #9 in S&T research achievement) • GIST, Jeonnam Univ, Chosun Univ, Honam Univ, Dongshin Univ (with undergraduate science and engineering departments) • Logistics Support – New logistics facilities (190K PY) to be established in Gwangju – Gwangyang Logistics Complex, Jangseong Logistics Complex (Jeonnam) Labors Union Members Union % Gwa ngju 740K 18K 2.43 Region Jeon nam 930K 30K 3.23 The Common Environments in Gwangju & Jeonnam Gwangju & Jeonnam provide healthy economic conditions such as robust consumer base locally, profound talent pool out of 56 universities, and low labor disputes
  14. 14. Naju Bitgaram Innovation City - generating new economic drivers Bitgaram Innovation City: Overview Overview - Location: Geumcheon/Sanpo-myeon, Naju, Jeollanam-do - Area: 7.334mn ㎡(2.22mn PY) - Target Population: 50,000 (20,000 households) with density of 68/ha - Corporates : 16 state-owned corporates including KEPCO Location - Excellent transportation system connected to adjacent regions - Functionally inclusive to greater Gwangju Metropolitan City (beneficial to invite more corporates) - Located at the central area of Jeollanam-do. Key industrial and support infrastructure located within 20km Trans- portation - 25 mins from Honam Express Way, 15 mins from Gwangju airport, 25 mins from Muan airport, 10 mins from KTX Naju station, 10 mins from Gwangju Songjeong station Naju Bitgaram Innovation City generates new economic drivers for the region based on the cooperation among corporates, universities, research institutions, and local governments
  15. 15. Global Smart Energy Hub_Bitgaram Energy Valley Bitgaram Energy Valley is the integrated new-industrial ecosystem that encompasses Gwangju Metropolitan City, Jeollanam-do and Bitgaram Innovation City in Naju Size: 5,841,000 m2 Size: 427,000 m2 Bitgaram Innovation City (BIC) Shindo Industrial Complex Docheon National Industrial Complex Bitgaram Energy Cluster(BEC) Jingok Industrial Complex Daeyang industrial Complex Ceramic Industrial Complex Environment Industrial Complex Nano Industrial Complex Damyang Eco Industrial Complex 3rd Cheomdan Industrial Complex Bitgaram Energy Valley (BEV) 3rd Pyeongdong Industrial Complex Docheom Local Industrial Complex Electric Vehicle Industrial Complex Bitgreen Industrial Complex Size: 9,214,651 m2 Innovation Industrial Complex
  16. 16. The Vision & Strategies of Bitgaram Energy Valley Vision: “The Global Smart Energy Hub to Generate Creative Future Values” • Infrastructure for power/energy sector R&D • Financial support for relocation and capital expenditure • Regional educational institutions to provide highly talented employees • Policy support such as Special Support Program for Regional SMEs • Research support in connection to industrial belt The Strategic Direction Expansion of Success Stories for Corporate Investments Early Relocation and Settlement Support for Corporates Education and Supply of Talented Employees The Goals High-tech Energy Corporates and Shared Growth Expansion of R&D projects and training of specialized talents Industries to drive growth in connection to specialized sectors Shared growth with local community Accelerated investments focused on key industries
  17. 17. Four Major Target Areas in the Bitgaram Energy Valley HVDC System engineering, transformers, valve systems, controllers, SW, etc. ESS PMS, PCS, BMS, medium/bulk storage BATT, etc. E V Drive motors, control components, high-voltage harness, batteries, etc. LVDC DC circuit breakers, switches, protective devices, power converters, electro pannels, etc. SG/MG Integrated operating systems, engineering, key components, ESS, etc. Renewable Generators, converters, wind power modules, photovoltaic modules, transformers, etc. Intelligent ICT New generation SCADA, digital converting systems, intelligent electricity supply systems, etc. ICT Security, etc. IoT, cloud computing, wireless network and security systems, etc. Additional Services Facility diagnosis systems, Big data utilization systems, etc. D R BEMS, HEMS, automated demand responses, maximum electric power systems, etc. E E High-efficiency equipment, etc. Transformer Low noise/vegetable insulating oil transformers, etc. Switching/Blocking High-efficiency, environment-friendly equipment, etc. Electric Wires, etc. Superconducting cables, hybrid insulators for power transmission, etc. Target Areas Field of Relevant Industries Energy New Industry Electricity /ICT Electric Power Facilities DR/EE
  18. 18. Global & domestic Major Companies in the Bitgaram Energy Valley No. – The Land Size of Each Distric
  19. 19. I The EV Industry OverviewIII
  20. 20. The National Energy Master Plan’s Key Tasks & Major Goals Happiness based on balanced development of economy and environment Vision Low Carbon Economy and Society Creative Economy based on Green Technology and ICT Safe Residential Infrastructure against Climate Change Policy Goals Effective reduction of greenhouse gas Sustainable Energy System Green Ecosystem Global Green Cooperation Policy Direction ·Implement greenhouse gas reduction roadmap ·Stabilize emission rights system and promote carbon market ·Establish long- term national reduction target ·Expand carbon absorption elements ·Manage energy demand ·Promote renewable energy ·Establish diversified power generation system ·Safety of energy-related facilities ·Develop high- tech and green technology ·Promote green creative industry ·Stabilize resource- recycling economic ecosystem ·Rationalize regulations and promote green- talents ·Develop capacity to manage climate change ·Expand eco- friendly infrastructure ·Develop green spaces ·Expand green welfare and governance base Sustainable Green Society ·Respond better to international climate protocols ·Expand local and global cooperation for green-growth ·Expand cooperations with developing nations ·Expand cooperation with GGGI/GCF Key Tasks The National Energy Master Plan by Korea Government Vision - Global #1 in Energy Solution System by 2030 Goals - KRW100trn market with 500K additional employment and 55mn reduction in greenhouse gas
  21. 21. World Electric Vehicle Market Outlook(~2020) Source: Electric Vehicle Market 2009 (HIEDGE), 야노경제연구소, I & Company Analysis (Unit: 10K) 3 8 16 27 44 60 80 112 147 191 233 286 7 62 Yano Reaserch Ins.’s Forecast CAGR (2012~2018E) = 43.8% HIEDGE ‘s Forecast CAGR (2009~2020E) = 51.3% 23.1% CAGR Otehrs 43.6%Chin a 44.0%Japa n 48.4%Europ e 54.5%US A ▪ Battery-powered electric vehicles are expected to grow mainly in indus- trialized countries such as the United States. – The US is expected to occupy more than 40% of the global BEV market by 2020, and if the European & Japanese markets are added up, the rate will reach about 90% of the total car demands World Electric Vehicle Market Outlook Korea’s demands on the EV will reach about 130,000 units by 2020
  22. 22. Structural Reorganization of the World's Auto Parts Industry The purchasing routes from only the vendors by finished car companies is changing into the globally any suppliers’ routes based on the appropriate price Modulization and Enlargement Global sourcing “Some of bargaining power of OEM shifts to the Module company” Value Chain after Modulization 2nd parts company Module company OEM • Transfer of some management authority to the module company Module – Transfer of some authority to purchase parts – Tendency to transfer an authority for QC • 1st parts company is divided into the module and secondary company – Phase change of 1st parts company not to be modulized to the secondary company • Increasing competition among the secondary companies – Increasing price competition due to double pressure of OEM과 Module company Global Market Commodity Complexity PBM CBM • Increasing tendency of companies combining PBM and CBM properly – 60% reduction of companies registered in Ford “The relationship with OEM is important in respect of quality” Price-based Biz Model Collaborative Biz Model “Parts Sourcing through an open tender for major parts companies” “Parts Sourcing through long-term trade for minor parts companies”
  23. 23. The Electric Vehicle Market Trend in Korea The Electric Vehicle Market Trend in Korea Korea Gov.’s Support policies on the EV’s the Test Beds/Distribution Early establish ment low- speed EV for demonstr ation Demonstr ation of Charging Infrastruct ure ▪ Ministry of Land and Transportation initiated demonstration of low-speed EV operations and monitoring – 10 purchases of low-speed EV being monitored under various urban and suburban conditions based on 13 offices and 57 inspection points of Transportation Safety Authority ▪ Ministry of Environment initiated demonstration project for EV charging infrastructure – Joint private-public projects for EV charging infrastructure with participation of MoE, Environment Management Authority, Hyundai Motor Group, Renault-Samsung, Samsung Electric, Lotte Mart – Performance and economic validity analysis on EV charging infrastructure based on 8 EV and 16 charging facilities to assess relevant policy Advance of domestic Li-ion battery industry ▪ Competitiveness of EV depends on that of battery technology ▪ Domestic battery technology equates to c. 90% of Japan, the leading battery-tech nation Increased governme nt interests ▪ New support programs due to government’s increased interests in EV ▪ Expedited mass production timetable based on government support (2020) Realization of smart grid ▪ World’s first smart grid demonstration complex established in Jeju – Established charging infrastructure for test-bed demonstration of battery-based EV 1 2 3
  24. 24. The Green Car Market Size in Korea (including EV and FCEV) Korea Green Car Market Forecast (10K units) HEV EV CDV FCEV ’10 ’15 ’20 ’25 ’30 Total 1.1 30.7 60.0 80.3 106.3 CDV 0.0 10.8 15.5 16.7 17.9 FECV 0.0 1.1 5.9 9.7 15.8 EV 0.0 5.5 12.7 18.6 27.4 HEV 1.1 13.3 25.9 35.3 45.2 16.3% 29.6.% 14.4% 28.8% 24.9% 32.4% 41.1% 20.4% Break Downs (’30) CAGR (’10~’30) Green Car Total 100% 25.7% In 2030(E) : about 1.06 bil. units In 2010 : about 10,000 units The green car market size in Korea is forecasted to grow by an annual average rate of 25.7% in 2010-2030 and to reach to 1.06 million cars in 2030
  25. 25. Bitgaram Energy Valley is a capital of Korean EV and FCEV Gwangju Creative Economy Innovation Center, Buk-gu Chumdan Industrial Complex III (Hydrogen EV) Gwangju KIA Motors (sedan, bus, truck) Yeonggwang EV Industrial Complex (Vehicle, Electric Equipments, Communication Systems) Gwangju Institution for Green Car Promotion, Jingok Industrial Complex (EV, Clean-diesel, Hydrogen EV) Yeongam Auto Complex, Daebul Industrial Complex (Auto, Theme Parks) Yeonggwang Gwnagju Yeongam
  26. 26. Gwangju Buk-gu(Northern Distric) Chumdan Industrial Complex III, Jingok Industrial Complex Chumdan IC III (Buk-gu, Gwangju) Jingok IC • Location: Buk-gu / Gwangsan-gu, Gwangju and Jinwon-myeon / Nam-myeon, Jangseong-gun • Area: 3.623mn ㎡ • Land Sale: starting June 2018 • Sector: R&D specialization • Location: Jingok / Goryong / Osun / Hanam-dong, Gwangsan-gu, Gwangju • Area : 1.911mn ㎡ • Sector: Machinery and equipment, electric components and equipment, auto and trailer, electric parts and communications equipment • Sales Price: KRW265,282/㎡ (KRW875,430/PY)
  27. 27. 사업목적Objective 사업주체Lead Entity 기대효과Expectations 사업기간Timeline 사업명Project Gwangju’s Plan for 1 Million Annual Capacity of Auto Production ▪ Gwangju auto cluster to secure 1 million auto production capacity as industrial hub of NE Asia to promote competitive edge of domestic auto industry and its growth 2016 ~ 2021 (6 years) Ministry of Trade, Industry, and Energy / Gwangju Metropolitan City Production base and cluster for 1 million annual capacity for auto production KRW11.2trn of production and KRW2.5trn of value-added, US$5.31bn of exports, and 27,000 additional employment National industrial complex specialized in auto industry Technological assistance to establish auto cluster Establish eco- friendly auto cluster
  28. 28. Jeonnam Yeonggwang Daema EV Industrial Complex, Yeongam Daebul Industrial Complex Daema EV IC (Yeonggwang) Daebul IC (Youngam) • Location: Songjuk-ri / Namsan-ri, Dama-myeon, Yeonggwang • Gross Area: 1.094mn ㎡ / Area Not Sold: 0.407mn ㎡ • Relocation Available: Immediate • Sectors: Auto and trailer manufacturing, electric equipment manufacturing, primary metal, electric parts/computer/media/acoustics, communication equipment, food ingredients • Sales Price: KRW119,526/㎡ (KRW395,000/PY) • Location: Nabul-ri / Nanjeon-ri, Samho-eup, Yeongam-gun, Jeonnam • Area : 11.374mn ㎡(national: 8.602, foreign-investment: 1.614, free- trade: 1.158) / foreign investment area lease : 0.699 mn ㎡ • Relocation Available: Immediate • Sectors: high-tech industry available for tax reduction under foreign investment promotion act or recognized by Minister of MoTIE • Foreign investment area lease price: KRW325/㎡ per year (lowest possible price in Korea) • Foreign investment area leasable land: 1,500+ PY • Foreign investment area lease period: 50 years (renewable upon every 10 years)
  29. 29. Yeonggwang e-Mobility Cluster Project ▪ Period: 2014 ~ 2019 (5 years) ▪ Location: Daema-myeon, Yeonggwang-gun, Jeollanam-do ▪ Size: Land 76 ㎡, Construction 4.2K ㎡ (including research center, external environment assessment facilities) ▪ Cost: KRW 70bn (government funding KRW48bn, provincial (do) funding KRW 9bn, local (gun) funding KRW 13bn) ▪ Objective: Establishment of short-distance EV ecosystem ▪ Key Entities - Public Authorities: MoTIE, Jeollanam-do, Yeonggwang-gun - Office in Charge: Korea Institute for Advancement of Technology - Supervision: Korea Automotive Technology Institute - Participating Companies: 18 companies including DY, Yeongshin Tech ▪ Relevant R&D Projects: Establishment of micro-mobility ecosystem with design initiative, infrastructure for demonstration environment for EV-based logistics Project Overview
  30. 30. Sampo Car Tuning Valley Project nearby Yeongam F1 Circuit Tuning Valley Project Premium Auto R&D Center • Location: Yeongam-gun Samho-eup Sampo-ri (nearby F1 circuit) • Area: 60,318㎡ of land, 4,509㎡ of building floor space (equipped with 1,753 of evaluation & 2,756 of research support instruments) • Sectors: R&D (5 tasks), establishment of the center, special equipment (8 kinds), evaluation method (3 kinds) • Total Project cost: 51.3 bil. won • Location: Yeongam-gun Samho-eup Sampo-ri (nearby F1 circuit) • Area: 990K ㎡(1st floor 212K ㎡, 2nd stage 778K㎡) • Sector: Establishment of infrastructure for car parts & tuning industry and attracting companies (more than 100) • Total project fee: 578 bil. won
  31. 31. 5 Main Projects for Sampo Car Tuning Valley Project Strategy Auto parts premium brand  Establishment of the evaluation basis of auto parts utilizing the pre-built F1 circuit and development of high- performance & high value-added parts technology for premium cars Tuning industry support system construction  Expansion of trust base through establishing evaluation & authentication system for tuning parts utilizing F1 circuit, which is the core infrastructure of them. Customized support for leading tuning parts company  Establishment of 4 kind support &analysis equipments for 8 leading companies Development of next-generation / high-efficiency automobile technology  Establishment of core parts & platform development infrastructures Tuning parts test bed  The F1 circuit, test & evaluation equipments, test road construction are essenctil to ensure the reliability of high performance tuning parts
  32. 32. KEPCO Plan for EV and Charging Infrastructure Annual Cost (2016-2020)4 Participating Procedure (Unit: KRW100mil.) Objective2 Background1 Promotion of Renewable Energy led by EV Industry Purchase of eco-friendly EV for corporates EV Charging Infrastructure (Star-Network) and Open-platform EV Charging Station Year 2016 2017 2018 2019 2020 Total Charger 5,600 800 550 500 500 7,950 Detail3 Year 2016 2017 2018 2019 2020 Total Cost 2,000 500 400 350 350 3,600 Procedure Date Note Notice of Battery Purchase Aug 2016 Open-platform, Star- Network Notice of Project Initiation Oct 2016 Open-platform Charging StationAgreement on Use of Charging Station Dec 2016 SME eligibility: Manufacturing of fast/low-speed EV charger, charging services at open-platform charging station SMEs to check bidding schedule for each participating project Year 2016 2017 2018 2019 2020 Total EV Purchase 180 120 150 150 180 780 Promotion of EV & Charging business to satisfy gov’t initiative & generate new economic driver
  33. 33. Status of Autonomous Driving Technology Levels by Companies in the World 구분 Company Main Function Commer -cializa- tion Autonomous Driving Levels (SAE) Autonomous Driving Levels (Navigant) ICT Cos Google Full self-driving automation 2020 Level 5 Leaders nVIDIA Full self-driving automation 2020 Level 5 Leaders Baidu Self-driving TBD Level 2 Contenders Finished Car Cos Audi Traffic jam assist 2017 Level 2 Leaders BMW Traffic jam assist , Predictive emergency driving assist 2018 Level 3 Leaders GM Self-driving, Lane keep assist 2017 Level 3 Contenders Ford Self-driving, Auto parking assist 2020 Level 3 Contenders Benz Traffic jam assist, ACC 2019 Level 3 Leaders Volkswagen Traffic jam assist, ACC 2020 Level 3 Contenders Volvo Self-driving, Lane keep assist 2016 Level 3 Contenders Hyundai, Kia Traffic jam assist , Lane keep assist 2020 Level 3 Contenders EV Cos Tesla ACC 2015 Level 2 Leaders * ACC: Adaptive Cruise Control
  34. 34. The Support Policies & Incentives for Foreign InvestorsⅣ
  35. 35. Tax exemption ▪ Provide 100% reduction and exemption for the first 5 years from corporate taxes and income taxes and 50% reduction and exemption for 2 years after that Target: Individual FIZ residential companies, companies engaging in high-tech technology industries and industry support services Investment condition (amount): Manufacturing company of more than US$ 30 million with R&D investment Of more than USS 2 million ▪ Provide 100% reduction and exemption for the first 3 years from corporate taxes and income taxes and 50% reduction and exemption for 2 years after that Target: Residential companies in individual FIZ, FEZ and company city development zone Investment condition (amount): Manufacturing company Of more than US$ 10 million with R&D investment Of more than US$ 1 million Reduction and exemption from national taxes: 100% reduction and exemption for the first 5 years / 50% reduction and exemption for 2 years after that Reduction and exemption from local taxes: 100% reduction and exemption for 15 years (applied with the percentage of foreign investments) ▪ Local taxes subjects to reduction and exemption: Acquisition tax, registration tax, property tax, aggregate land tax
  36. 36. Cash support and other support systems ▪ Cash support can be supported after going through review by the government’s committee on Foreign Investment and local governments by taking into consideration of investment scale and investment characteristic. Target: Investment company with more than 30% of foreign investment ratio ▪ Investment condition - Green field investment by a company in advanced technology fields or components and parts manufacturing fields - Investment on newly building or extending R&D facilities regarding advanced technology business (with more than 5 permanently hired researchers) - Investment on creating large number of new jobs (50~300 persons) - Other supports for multinational companies' local headquarters, regional strategic industries, etc. Cash support: able to support cash subsidies for newly building or extending production facilities or R&D facilities with advanced technologies Location support: Able to provide support for renting land, etc. according to investment scale and investment characteristic
  37. 37. Energy Valley - Regulation Free Zone for the New Energy Industry ▪ Regulation free zone: Promote regional strategic industries by innovating regulations that interfere with free corporate activities ▪ Zero regulation: Abolish key regulations like entry into new industries by business type, location and convergence and improve actual regulations on companies to meet zero - Attract private investments in regional strategic industries - In the case of new convergence industries, ensure the creation Of new markets and businesses by allowing pilot projects to be carried out within the regulation free zone. ▪ Government support: Provide various support required for promoting regional strategic industries, including finance, tax exemption, manpower and location. ▪ Regulation free zone and Energy valley - Gwangju/Jeonnam where Energy Valley is located has been designed as the regulation free zone for the new energy industry(partial region) - Look forward to active corporate investments in new industries through innovating regulations so that various industrial activities can be implemented for the new energy industry.
  38. 38. Energy Valley – Special Support Region for local SMEs ▪ Naju Innovation Industrial Complex = Designated as a special support region for local SMES ▪Naju Innovation Industrial Complex is one of the major neighboring industrial complexes of Energy Valley, which has been chosen as a special support region to support local SMEs. ▪Benefits of special support region - Able to make limited competitive bidding and private contracts on orders from public institutions and local governments - Provide 50% reduction and exemption from corporate taxes or income taxes for 4 years after the initial first year Of taxation for residential SMEs - Receive favorable evaluations regarding competitive products and goods purchased from local SMEs during public purchasing
  39. 39. Infrastructure for Energy Valley Investment Companies ▪ Energy Valley Supporting: A center for supporting Energy Valley investment and start-up companies - Support equipment testing and operate joint laboratories and start-up rooms - Residing at the research institutes of the Korea Electrical Engineering & Science Research Institute and the Association of Korean Electrical Industry → Cooperation on R&D with investment companies ▪ Energy Valley Integrated Verification Test Center: Provide integrated management on verification tests for the new energy industry ▪ Energy Valley Technology Institute: Provide support on start-ups in power and energy fields(targeting companies at research institutes within the special zone) ▪ Energy Valley Research Center: Provide consulting on R&D and investment companies for the new energy industry Facilities for Supporting Energy Valley Investment Companies
  40. 40. Infrastructure for Energy Valley Investment Companies ▪ Make investments of about KRW 10 billion annually to ensure R&D cooperation among investment companies, KEPCO and affiliated organizations - Projects for R&D cooperation to develop specialized technologies for Energy Valley (regularly hold subscriptions for tasks) ▪ Open Gochang Electric Power Test Center and conduct tests on equipment ▪ Establish F/R ESS and establish energy-independent islands with DC currents ▪ Develop and verify MG technologies by utilizing island regions (Ulleungdo, Gasado, etc.) ▪ Establish smart energy campus (Project on creating MG at universities) ▪ Create smart Cities within innovative Cities (integrate energy, water supply and disaster related systems) ▪ Establish EV charging star network and develop smart power system by utilizing IOT, etc. R&D Cooperation and Promotion of Growth Engine Talent Development— Foster Energy Specialists ▪ Develop departments specializing in energy at regional universities ▪ Develop programs for fostering energy specialists ▪ Establish a website exclusively for hiring workforce to work at Energy Valley investment companies, etc.
  41. 41. The Various Funds available for SMEs The Fund Launching for Fostering SMEs 1. Amount: KRW200bn 2. Rates Reduction: base 2.7% + additional up to 1.3% - Example: Interest Rate (4.5%) - reduction (3.946%) = applied rate (0.554%) 3. Funding to date: KRW75bn to 63 companies 1. Amount: KRW48.5bn 2. Purpose: Funding support via Venture Capital 1) Renewable Energy Fund (KRW23.5bn): Isang Technology Investment 2) Energy Valley Fund (KRW20.0bn): POSCO Technology Investment 3) Bitgaram Fund (KRW5.0bn): Magma Investment The Fund Raising for SMEs’ Developments
  42. 42. Thank you very much!