The Ministry for Food, Agriculture, Forestry and Fisheries (MIFAFF) is going ahead with an ambitious scheme to create a National Food Cluster, “Foodpolis”, in an area of 2.32 million square meters in Iksan, Jeollabuk-do by 2015.

Foodpolis which is similar to California’s Silicon Valley for IT, will likely become a global food hub targeting Northeast Asian markets. It will be the home of 160 food makers and research institutes, which will have R&D collaborations and other synergetic effects for the development of new technology and products.  

MOUs have been already signed with 57 would-be tenant companies and research institutes.

“We’re doing our utmost to create an optimal environment for our food makers’ research and the production of new products while accelerating efforts to attract Korean and foreign food manufacturing leaders’ investments,” said Oh Jung-kyu, Vice Minister of the Ministry for Food, Agriculture, Forestry and Fisheries (MIFAFF).

The following are excerpts from an interview between NewsWorld and MIFAFF Vice Minister Oh speaking the details of the national food cluster project, including incentives attracting foreign investors. 

Question: What will the proposed Korean national food cluster look like?

Answer: “Foodpolis” is an export-oriented cluster the Korean central government will inaugurate in Iksan, Jeollabuk-do, in cooperation with local governments by 2015. It will serve as a global food hub targeting North East Asian markets including China and Japan, similar to the way California’s Silicon Valley is for IT, where global players such as Google, Apple, and Yahoo are converged for synergetic effects. The national food cluster will host 160 food makers and research institutes whose close collaboration will lead to advances in the food processing industry, thus allowing commodities within Foodpolis to be exported efficiently through seaports and airports nearby.  

The project will cost 553.5 billion won to construct a food industrial complex covering 2,320,000 square meters (700,000 pyeong) that will house 160 food makers and research institutes. 

The government forecasts that the revitalization of the national food cluster will see its sales and exports surge to 15 trillion won and 3 trillion won by 2020, respectively, thus not only enhancing the competitive edge of the Korean food industry, but also greatly contributing to the development of the regional economy.

Q: Will you elaborate on the progress of the Korean national food cluster project?

A: In December 2008, the government decided to build a national food cluster in Iksan, Jeollabuk-do, and announced a basic plan for the establishment of the cluster. The government also established the 2009-2011 government investment and financing plan and an industrial complex development plan, and designated Korea Land & Housing Corp., Korea’s representative public enterprise, as the developer of the complex. This past June, the food cluster was designated a national industrial complex, and procedures for land compensation are now under way.

As this past July, a government committee also established and announced a master plan containing the vision, goals and action plans of the national food cluster. The government is aggressively pushing ahead with the project with a firm determination to ensure that tenant companies can  move into it in 2015. 

Q: What are the differences between the national food cluster and a conventional industrial complex?

A: Foodpolis is a food industrial complex designed to build key infrastructure for the promotion of the food industry jointly undertaken by MIFAFF, the Jeollabuk-do provincial government and the Iksan municipal government. 

Initially, the national food cluster will provide a first class water for daily life use, to be purified with a raw water treatment plant in consideration of the food industrial complex whose water quality will be examined and managed periodically. 

The national food cluster will be a clean industrial complex in which facilities for treating wastewater and garbage from houses and factories are located underground. 

An uninterruptible power supply system will be in place to ensure a stable supply of energy, and administrative one-stop support system will be offered for R&D activities for the development of new products and exporting. 

Q: What steps will Foodpolis take to improve settlement conditions such as education and housing for the employees of prospective foreign and Korean food tenant companies?

A: The national food cluster is going to offer the best housing, educational, and cultural environment for food maker and research institute occupants by building a “Food City” suiting the characteristics of the national food cluster.

Employees from the tenant companies and research institutes will be given preferential treatment in the distribution of housing.  

Foreign educational systems will be in place to offer educational services equivalent to those of advanced countries.

A global food theme park, a food tasting/exhibition center, a traditional Korean food museum, a convention center, and other regional and thematic culture spaces will be established to make the national food cluster a global food culture and tourism destination.

Q: What incentives will be offered to investors of Foodpolis?

A: Foodpolis, the first food industrial complex in Northeast Asia to offer one-stop services ranging from R&D activities to production and export, has diverse merits compared to other neighboring countries. 

Firstly, the central and the provincial governments’ spearheading of the project will likely contribute to tenant companies’ stable investments. 

Secondly, investors of Foodpolis are in a more favorable position to export their products abroad. Korea is in close proximity to the huge market of Northeast Asia with a combined population of 1.5 billion, including Japan and China. Korea has become the third largest customs-free economic territory in the world as the nation has so far signed a Free Trade Agreement with 47 countries, including the United States and the European Union.

Thirdly, Foodpolis will have six support facilities, including its own top three R&D centers on efficacy evaluation, quality/safety and packaging, pilot plants, and rental factories to enhance tenant companies’ competitive edge.

Last but not least, as Korea’s electricity and water charges are lower than other neighboring countries, the national food cluster will offer lower electricity and water charges compared to other neighboring countries. In addition, it will offer a 22 percent corporate tax, lower than the 25 percent in China and 40 percent in Japan. Also, foreign occupants of the Foreign Investment Zone will be entitled to site lease reductions ranging from 50 percent to 100 percent over 50 years and their lease can be renewed by up to an additional 50 years. Foreign investors will benefit from a 100 percent reduction in corporate tax over three years plus a 50 percent reduction after the following two years. They will be offered an acquisition tax exemption plus a 100 percent reduction in property tax over five years. Moreover, investors will receive up to 10 billion won in investment subsidies along with education/training subsidies. 

Foodpolis will create a business-friendly environment for housing, education, culture, transportation and water utilization, while tenant companies will be given incentives in the utilization of six corporate support facilities, including the Food Functionality Evaluation Center. 

Q: Will you introduce to our readers the achievements your ministry has made towards attracting investments and future plans?

A:  The government has so far signed MOUs with 57 Korean and foreign would-be tenant companies and research institutes. Major signatory companies include CJ Jeiljedang, Dongwon F&B for the fisheries, Hansung, Harim of the livestock industry, and LogisAll of the logistics sector as well as foreign companies and research organizations, including Is Fra Skiro, of Denmark,; Wellsprings, of the United States,; and Festivaro of Japan. We’ re devoting ourselves to attracting such global food makers and research institutes as Nestle, Danone, ConAgra Food, and Nizzo Research Institute. In this regard, we’re employing diverse means such the touring of the companies and research institutes and delivering the MIFAFF minister’s  letter. 

Q:  For our last question, will you introduce us to R&D policies of the Korean agricultural and food industries to expand its growth engines?

A: The government has embarked on the full-fledged implementation of policies on the promotion of the food industry with the inauguration of the revamped MIFAFF in February 2008, which calls for expanding the food business segment, by being separated from the existing agricultural technology development project. The government, which launched the 18.3 billion won food technology development project in January 2010, provided 29 billion won in support in 2012, and plans to expand investments by redoubling R&D investments in the sector by 2017.

The ministry has worked out major policy means to nurture the Korean food sector into a new growth engine by establishing a R&D support regime concentrating on food-related companies, departing from the conventional R&D framework in the agricultural sector. It is designed not just to develop technologies, but also to encourage the enhancement of added values through commercialization and improve customer satisfaction. 

Our ministry plans not only to offer diverse support regimes and expand satisfaction of beneficiaries but also to expand government R&D investments and induce the private sector's investments. These plans will be pushed forward so that the industry’s competitiveness can be enhanced by supporting the development of core application technologies, while seeking to purse customized technology development, to build a system for providing corporate support en bloc and to implement joint projects with foreign research institutes.