The Incheon Metropolitan Government (Mayor Park Chan-dae) formally submitted its ‘Application for the Designation of Incheon’s Jemulpo-gu Steel Sector as an Industrial Crisis Preemptive Response Area’ to the Ministry of Trade, Industry and Energy on the 21st. The aim is to secure preemptive government-level support for Jemulpo-gu’s steel industry, which has been pushed into crisis by a combination of adverse factors, including a slump in the construction market and an influx of low-priced Chinese steel products.
 [코리안투데이] A panoramic view of the Jemulpo-gu steel industrial complex © 장형임 기자 |
Incheon announced on the 21st that it had submitted an application to the Ministry of Trade, Industry and Energy to designate the area as an Industrial Crisis Preemptive Response Area in order to help Jemulpo-gu’s steel industry overcome its crisis. The application is a measure to secure a channel for comprehensive government support at a time when the downturn in the region’s flagship industry is spreading to partner firms, local commercial districts, and the job market.
Jemulpo-gu’s steel industry has struggled amid a convergence of domestic and external difficulties, including a prolonged slump in the construction market, an influx of low-priced Chinese steel, stronger U.S. steel tariffs, and rising industrial electricity rates. Anchored by Hyundai Steel and Dongkuk Steel, the area has served as a key hub for steel supply to the greater Seoul metropolitan region, but because its industrial structure is centered on reinforcing bars, it has taken a direct hit from the nationwide steel downturn.
In fact, Hyundai Steel carried out intensive restructuring in January, permanently shutting down its electric-arc-furnace steelmaking plant and small rolling mill and implementing a voluntary retirement program, while Dongkuk Steel has continued its own self-rescue efforts, such as cutting output and adjusting utilization rates. Despite these efforts, however, the fallout from the worsening business conditions has spread in a chain reaction to partner companies, local commercial districts, and jobs, threatening the regional economy as a whole.
The ‘Industrial Crisis Preemptive Response Area’ is a system under which, pursuant to the 「Special Act on Responding to Regional Industrial Crises and Reviving Regional Economies」, the government provides preemptive support to areas where a sharp downturn in a key industry is anticipated. Once an area is designated, comprehensive support programs covering companies, workers, and the regional economy as a whole are activated for two years from the date of public notice. Specifically, emergency management stabilization funds, policy financing support, loan maturity extensions and repayment deferrals, interest subsidies, research and development (R&D) and commercialization support, and employment stabilization and job-transition assistance are provided in line with the region’s characteristics.
To prepare the application, Incheon activated a ‘Steel Industry Crisis Response Task Force of Relevant Agencies’ centered on its Economy Bureau, while also launching a public-private council involving the Incheon Chamber of Commerce and Industry, Hyundai Steel, Dongkuk Steel, and the Korea Institute of Industrial Technology to build a joint response system. The city also raised the quality of its application by benchmarking exemplary cases from South Jeolla Province, conducting on-site visits to companies, carrying out detailed fact-finding surveys of steel firms and their partners, and analyzing the economic ripple effects. After the administrative reorganization abolished the former Dong-gu and launched Jemulpo-gu, the city thoroughly overhauled the relevant statistics and application materials and completed the application on a Jemulpo-gu basis.
The city expects that, if the designation is granted, it will spur technological innovation among steel firms and their transition to eco-friendly, high-value-added industries, and serve as a decisive catalyst for stabilizing the management of partner companies and preserving local jobs. This, in turn, will help ease employment anxiety for local workers and residents who have depended on the steel industry for their livelihoods.
Earlier, the city had also pursued designation as an Employment Crisis Preemptive Response Area under the Ministry of Employment and Labor and achieved results. The former Dong-gu was designated in April, before the administrative reorganization, followed by Jemulpo-gu again in July, and the city is currently using the 4 billion won in national funds secured through this to carry out support projects for steel-sector workers.
Going forward, the Ministry of Trade, Industry and Energy will begin by reviewing the application and then proceed through consultations with relevant ministries, on-site inspections of steel firms within Jemulpo-gu, and deliberation and resolution by the Industrial Crisis Response Deliberation Committee before finalizing the designation.
Incheon Mayor Park Chan-dae said, ‘The steel industry is a national core industry that supports not only Jemulpo-gu but also Incheon’s manufacturing sector and the industrial ecosystem of the greater Seoul metropolitan region,’ adding, ‘Since the difficulties steel companies are currently facing could develop into a crisis for the entire regional economy, swift government support is absolutely essential.’ He went on to stress, ‘We will work closely with the Ministry of Trade, Industry and Energy and do our utmost to the very end to ensure that the designation as an Industrial Crisis Preemptive Response Area is achieved,’ and ‘We will continue to pour all our capabilities into strengthening the competitiveness of Incheon’s steel industry and protecting quality jobs, so as to breathe new vitality into the economies of Jemulpo-gu and Incheon.’
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