Every Korean province touches the sea except one. That exception is Chungchongbuk-do, the landlocked status of which has helped it develop a quite different atmosphere from the other provinces. In Korea, it is generally thought that people living near the ocean have a rougher, hardier character than those living inland, which naturally leads to the impression that the people of Chungchongbuk-do are a gentle, warmhearted people. While it is difficult to place confidence in such generalizations, it is certainly true that the province's geographical traits have influenced its place in Korea's economic order.

Upon cursory glance, the image Chung-chongbuk-do, or Chungbuk, seems to be of a weak link in the economic chain. Chongju, the little-known administrative capital of the province, is widely recognized in the country as a city of education (200,000 people are students among the total population of 530,000), but the fact that a large scale industrial complex is located in the city is not well publicized and even fewer people notice the major presence of foreign companies here.

The stereotypes about the province materialize primarily from the fact that a lot of major industries need marine transportation access, so much of Korea's industry, along with most of the industrial complexes, were developed in coastal areas near cities like Pusan, Pohang, Ulsan, Yosu, Inchon, etc. But even though there are still some industries which need to be located on the coast, modern transportation and communication have made the differences between coast and inland negligible.

So, if a company wants to be involved in an industry like oil refining or steel or others requiring ports, Chungbuk may not be the ideal place for a plant. But, for high value-added industries, such as electrics, electronics and petrochemical industries, the province has emerged as a prime location. That is proven by the fact that 57 companies out of the 145 in the biggest industrial complex in Chung- buk, are in the electric/electronics industry.

So Chungbuk is certainly not a weak link in Korea's economic chain, but is rather increasing its economic vitality and has a quite different character than most people believe. Mr. Joo Byong Duck, governor of Chungbuk, says, "Chungbuk has not been in the center of the Korean government's industrial development plan because the coastal regions were considered first. But the situation has changed. Our province has caught up with the other provinces by focusing on the high value-added industries."

Mr. Han-Koo Kaang, vice president of Texas Instruments Korea in Chinchon, believes, "Chungbuk is the best place for our company."But what makes it so? Why are there so many companies flocking to this little-known corner of Korea?

According to Sim Sangkyul, director of the province's International Cooperation Office, Chungbuk's biggest upside is, indeed, the stereotypical gentle and warmhearted people. This is confirmed by many of the personnel managers of both the domestic and foreign companies doing business in the region. When the Korean economy was hamstringed with numerous labor disputes in the late 1980s, the companies in Chungbuk had no significant trouble. And more recently, labor disputes have been around zero percent in Chungbuk. This is certainly a great advantage for the foreign-invested companies, because labor conflicts have often been the biggest hurdle for foreign-invested companies to clear.

An Interview with Han-Koo Kaang, vice-president of TI Korea When choosing an overseas site for manufacturing, why did Texas Instruments choose Korea? The first policy of the TI Group is to manufacture and sell our products in the places our customers want. The electric control products and burn-in sockets that TI Korea produces are closely related with refrigerators, air-conditioners, and semiconductors, the industries in which Korea has a higher position than other countries. Also, the future prospect of those industries in Korea seemed bright, so TI chose Korea. Then what made TI come to Chungbuk instead of another region in Korea? First of all, we thought that Chungbuk was situated in the best place. Our customers are in Suwon, Ichon, Changwon, and Pusan. And Chungbuk has good access to all those places. Especially since the Chungbu highway is just a stone's throw away from our factory, it is really easy to get out to other places anywhere in Korea. Once the Chongju International Airport opens this March, this place will have much improved transportation advantages, making Chungbuk a place of great commercial importance. Considering other investment climates, Chungbuk is still an attractive place. When our factory was established in 1989, there were only 80 factories in the Chinchon area, but now more than 450 factories are in operation. That means this place must be pretty attractive to those companies. Do you think TI Korea has been successful so far? Before the construction of our plant here, we thought that with the combination of TI technology and the high quality of Korean's production ability, we could produce the best quality products in the world. And the prediction turned out true. TI once compared the productivity of factories in four different countries, Italy, the U.S.A., Brazil, and Korea. In this comparison the Korean factory showed 20 percent higher productivity than the other factories, with best quality. So, TI Group headquarters thinks of Korea first when it installs a new piece of equipment, and since Korea has become known as a model factory within the TI Group, many people visit here for study. What is your opinion of the people of Chungbuk? I think the productivity of Korean people, especially those living in Chungbuk, is worthy of world-wide recognition. They learn new technologies quickly and correctly, showing high productivity. And they abide by the policies of our company, which is a big advantage for the management of our company. As is the case for the whole TI Group, TI Korea doesn't have a labor union because of high degree of satisfaction among our employees. What are Chungbuk's weak points? Though land prices in Korea are relatively high, this was not a big obstacle for us. Considering the general conditions like manpower, transportation, living environment, etc., Chungbuk can be described as a region which has more upsides for foreign-invested companies than downsides. What is your personal impression about TI in Korea? I have worked for TI for 18 years. In my opinion, TI has a very reasonable management system, excellent technologies, and a deep and thorough concern about the environment. And as a famous semiconductor manufacturer, TI has had a positive influence on Korean industry and is actively taking part in the interests of the local society and economy. Judging from these aspects, there is no doubt that future prospects for TI Korea are bright.

Another upside for Chungbuk is its central location on the Korean peninsula. It means that access to other parts of Korea is convenient. The distance from Seoul to Chongju is just 120§°--only one hour and twenty minutes away by car--and it is within easy reach of other major Korean cities such as Taejon, Taegu, Pusan, and Kwangju, as well. That geographical merit is appreciated by Kim Woon-Woo, manager at Johnson Matthey Korea's plant, who says, "Chinchon is a place which has convenient connections with our customers, Hyundai Electronics in Ichon, Samsung Electronics in Kiheung, and LG Semiconductors in Chongju. That's the main reason we chose this place for our operations."

The Chungbu highway bisects Chung-buk and makes a transportation corridor that serves to diminish distribution costs. And the Chongju International Airport, scheduled to be opened in March, will process 2.5 million people and 20 tons of freight every year, making Chungbuk a more attractive player internationally. In addition, Chungbuk has other plans to expand its infrastructure. Governor Joo says, "To support the activities of companies located in our region, our province is doing its best to put sufficient infrastructure in place, such as electrification of the Chungbuk Railway and construction of two more highways. Also, when the construction of a multimedia complex, container base, and total distribution center around the Chongju International Airport is finished, Chungbuk will have both the geographical advantage to reduce distribution costs and a concentration of industrial information. " This statement tells that, in terms of transportation, Chungbuk is certainly not behind any other region in Korea.

Chungbuk, which has much more business activity than is generally known, is today home to 87 foreign-invested companies from 15 countries. They include some pretty distinguished names, like Jinro Coors Brewing Company (U.S.) which--like Coors' Colorado home--takes advantage of the clean water, Nestle Korea (Switzerland) which is a well-known manufacturer of foodstuffs, pharmaceutical maker Boehringer Ingelheim Korea (Germany), KORLOY Inc. which is carbide tool manufacturer, and Texas Instruments Korea which manufactures electric control products.

The motives for those foreign companies choosing Chungbuk as their industrial base include making use of a high-quality labor force, the fewest incidents of labor dispute in all of Korea, abundant clean water, access to markets and transportation, and good quality of life.

Meanwhile, the foreign-invested companies contribute a lot toward the economic development of the region by transferring technology to Korean companies, by training Korean workers with their advanced management system, and by instilling a competitive mind in Korean companies, making them employ a new and better management strategy. Their exports also contribute to the local economy.

Recognizing the positive effects of foreign companies' investment in Chungbuk, the provincial government has prepared a variety of policies supporting foreign activity. Chungbuk runs a "One-Stop Service System" to dramatically improve the procedural aspects of a foreign company's investment and to settle difficulties related with established foreign investments. Chungbuk also gives administrative, tariff and financial incentives to foreign-invested companies. For five years after the first year of making a profit, every foreign-invested company is exempt from paying corporate tax, special excise tax, and value-added tax, and for the subsequent three years, 50 percent of each tax is exempted. And when the foreign-invested company imports raw materials for production, customs tax, special excise tax, and value-added tax are waived. All these favorable policies are in place to induce competitive foreign companies into Chungbuk. When a foreign company bringing high-technology invests, up to 100 percent of operation capital can be borrowed from overseas. Companies without high-tech designation can borrow up to 50 percent of operation capital.

Chungbuk is trying to foster the industries which can make best use of what the province has to offer, and they are easily identified by looking into the industrial complexes which are scheduled to be opened in the near future. Thirty-three small and large industrial complexes are now running and eighteen are under the construction. Among them, major complexes include the Ochang Scientific Industry Complex, Osong Medical Science Complex, and Chongju Scientific Industry Complex.

Governor Joo Byong Duck

The Ochang Complex, which is opening this year has already sold 80 percent of the total area. This complex invites high-technology companies related to semiconductors, computers, automation equipment, and aerospace industries. The Osong Complex will open next year, and encourages medical science, pharmaceutical, and food companies to move in. Both the Ochang and Osong Complexes will adjoin the Osong New City which will accomodate 300,000 people, making the whole region an ideal area not only in terms of administrative function but also leisure and cultural function. The Chongju Complex, available for move-in next year, invites telecommunication, new material, and precision chemical companies.

Though today's Chungbuk, as an industrial site, is of significant value, its real worth seems to be in the future instead of the past. In other words, the future potential of Chungbuk seems greater than the success of today. But while talking about all the industrial virtues of the province, one cannot ignore the tradition, natural environment and historic relics that make life in Chungbuk a little more attractive.

Chungbuk is famous for its traditional culture and loyalty. This is the place where metal type for printing was first invented (in 1377), and the province is proud that it has produced a number of loyal retainers, righteous persons, and dutiful sons and daughters throughout its history.

Its location in the center of the peninsula means Chungbuk is surrounded by beautiful mountains, and three national parks--Sobaek Mountain, Worak Mountain and Songni Mountain. Chungbuk is also rich with tourist destinations such as Chojong Yaksu (a famous mineral water spring), Suanbo Hot Springs, and Sokhweam Cave. There is very little pollution and the Chungju Dam and Daechong Dam, which supply industry with clean and sufficient water, have become popular recreation areas for thousands of travelers from all over Korea.

A legendary tale, based on fact, comes from an area in Chungbuk called Danyang. It seems there was a commoner called the "Fool Ondal" (in fact he was not really a fool but a very naive and warmhearted person) who married a princess of the day and became a great general. Isn't it a logical conclusion that, if the warmhearted commoner could become a powerful general when given the chance, that warmhearted Chungbuk can become a powerful economic force in the world now that it is striving toward that end?

by Soo-Young Jang