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Located in the southeastern-most part of the Korean peninsula, Ulsan and its region has a well-established tradition of acting as a link between the Asian continent and points overseas. For example, the port city is just 100 miles' distance from Japan. By exploiting its favorable geographic condition, Ulsan has been instrumental in the national drive towards industrialization. The city is now repositioning itself as a center for tourism in conjunction with its role as an industrial hub, capitalizing on its rural surroundings. At the threshold of the 21st century, Ulsan is now planning a number of projects designed to launch the city on its second economic takeoff. Ulsan is undisputedly the largest industrial city in Korea. The city's petrochemical industrial complex established in 1972 has been the mainstay of Korea's industrial development through its production of synthetic resin and various chemical products and resources. Basic materials and petrochemical goods are produced in Ulsan's Onsan Industrial Complex, an important component in the drive toward economic self-sufficiency and the promotion of balanced industrial development. Many of the Korea's leading manufacturing enterprises now have a base in Ulsan. They include world's largest shipbuilder Hyundai Heavy Industries and world-class car builder Hyundai Motor. Other big names include petrochemical giants such as SK, BASF Korea and DuPont Korea. As the world's largest builder of vessels, ship engines and other heavy equipment, Hyundai Heavy Industries in particular has made an enormous contribution to the development of the national economy from its Ulsan base. Hyundai Motor has the capacity to produce 1.2 million cars annually and exports automobiles to 140 nations around the world. Following its takeover of Kia Motors and it will soon emerge as the world's tenth-largest car maker with an annual production capacity of 2.4 million vehicles. "Ulsan is a model Korean industrial city, accommodating mainstream industries such as automobiles, shipbuilding and petrochemicals. Equipped with a well-developed industrial structure, the city is poised to expand its port and related facilities with a view to becoming the transportation and distribution hub of Northeast Asia," said Kim Kwang-su, chairman of the Industrial and Construction Committee of the city's local assembly. Mr. Kim stressed the assembly will offer all possible legal and institutional assistance to the city administration in matters pertinent to foreign investment promotion. He said the assembly will do its utmost to constantly improve the environment for foreign investment both in terms of doing business and everyday living for foreign corporate personnel. As one of the leading industrial cities of Korea, Ulsan offers a variety of incentives and attractions for foreign investors. Importantly, the city furnishes excellent forward/backward industrial linkages between related sectors. High quality, well-educated labor, natural resources and intermediate products may be easily accessed. No city in Korea can quite match Ulsan's record of development. Since it was designated as a city in 1962, Ulsan's pace of growth has been stupendous as it developed as the center of the nation's core industries: automobiles, shipbuilding and petrochemicals. As of the end of 1997, Ulsan had generated 45.6 trillion won worth of industrial production, accounting 11.3 percent of the national total. It also posted $15.5 billion in exports, or 11.4 percent of all Korean overseas shipments. The city's industrial complexes cover 69.4 million square meters, or nine percent of the nation's total. The city is home to 1,300 manufacturing companies employing 150,000 highly-skilled workers. Ulsan also has the benefit of a huge regional market of 10 million people comprising nearby cities such as Kyongju and Pusan. Ulsan is well equipped logistically. The port city has an airport, is well connected by railroad, and stands adjacent to the Kyongbu Expressway which links Seoul and Pusan. Ulsan Port can accommodate 89 ships simultaneously and can handle 150 million tons of cargo a year. In this capacity it has outperformed Pusan and Inchon Ports to become Korea's premier port. With the completion of a new 28-berth port now under construction, Ulsan will be set to become one of Northeast Asia's major ports. Ulsan is also well integrated into the national transportation system. Rapid connections by road are offered by the Kyungbu Expressway, and the city is well-served by bus and train services connecting it with other major national cities. Connections will be improved further following the completion of the projected coastal road and the high-speed railway linking Ulsan and Pusan. Ulsan will broaden local national roads to four-lanes and the Pusan-Ulsan highway section to six lanes. A new highway will connect Pusan and Ulsan directly. The result of these efforts will be that Ulsan will have a low-cost and high-efficiency transportation structure that will cut logistical costs through improved connections with neighboring centers such as Pusan, Kyongju and Yangsan. The city will also construct a south circular road by 2001, a east-west expressway, and a freeway along the Taehwa River running through the city by 2007. Four urban freeways will serve to improve the flow of traffic. Surrounded by seven major mountains including Mts. Kaji and Shinbul of more than 1,000 meters in height, Ulsan boasts a superb natural landscape redolent of the European Alps. Ulsan borders Kyongju whose historic areas have been designated world cultural heritage sites by the United Nations Educational Scientific and Cultural Organization (UNESCO). The clean beaches of the East Sea, coastal landscapes, and valleys where ice may be found even in summer all add to the attractiveness of Ulsan and its environs. Companies wanting to establish themselves in Ulsan may expect a ready supply of relatively high-quality labor both locally and from nearby Pusan and Kyongju, approximately one-and-a half hours and 30 minutes away from the city by car, respectively. Ulsan is Korea's youngest city. The average age of its population is only 26.9 years compared to the national average of 29.7 years. The generation in their 20s and 30s account for 41 percent of the entire population, an important asset in enabling the city face the challenges of the 21st century. Ulsan also possesses strong intangible benefits to attract foreign investment. "We offer factory sites at prices cheaper than in anywhere else in Korea," said city mayor Shim Wan-koo. "We also intend to provide land for foreign investors under 'destructive' terms" (i.e., terms which are extremely beneficial to the purchaser). As one of the Korean cities chosen to host the 2002 World Cup, Ulsan has committed itself to the success of this prestigious international sporting event. Among World Cup-related projects the city is undertaking are the construction of a soccer stadium, improved accommodation and traffic facilities, and the development of cultural facilities. In the current period of preparation, investment will be focused on the development of infrastructure facilities such as the enlargement of the water supply, water discharge and road systems. City fathers believe the World Cup Soccer tournament will serve to give their citizens a global perspective, introduce new ways of thinking, and uplift both their consciousness and the city's cultural standards. They predict the city will seize upon the event as an opportunity to give momentum to its nascent tourism and service industries by promoting its natural surroundings and cultural sector, utilizing nearby cultural heritage sites. Ulsan Metropolitan City Investment-Trade Service
by Soo-Deuk Sohn
Foreign Investors in Ulsan As of the end of October 1998, 50 foreign companies had invested $1.243 billion in Ulsan. By country, Japan topped the list with 23 companies, followed by Germany with seven, and the United States with six. Major foreign-invested enterprises include DuPont Korea, BASF Korea, Samsung BP. They also include Ssangyong Oil Refining, a joint venture between Aramco of Saudi Arabia and Ssangyong. Mitsubishi of Japan also ranks prominently as a foreign investor since it is invested heavily in Hyundai Motor. DuPont Korea Inc.
With an annual turnover of $40 billion, DuPont operates 28 production facilities in 14 Asian-Pacific countries. DuPont was motivated to locate its operation in Ulsan because of the ease with which it might export through the Ulsan and Pusan Ports. Additionally, the company has been able to obtain a supply of valuable human resources and material through cooperative ties with numerous small and medium-sized companies operating in the region. At the end of August 1998, DuPont took over the managerial rights, facilities and employees of the Kumi plant of Dongkuk Synthetic Fiber, a facility in the Ulsan area. DuPont's takeover of the Korean firm drew special attention and the company is reportedly poised take over another two to three Korean factories by 2002. DuPont Korea is expected to register $1 billion in sales by 2002, about three times the $340 million in 1997. DuPont established its leadership in the world chemical industry by inventing nylon from a combination of coal, water and air in 1938. DuPont posted $2.4 billion and $45.1 billion in turnover in 1997. BusinessWeek named the company as the best chemical company in the United States in its March 1998 issue. The prospects for DuPont in Korea are bright in view of the continually expanding automobile industry. DuPont's Ulsan factory produces glass films for automobiles and interior plastic goods. As DuPont Korea considers Korea a manufacturing platform from which to penetrate markets in the Asia-Pacific region, the company is expected to increase the level of its Korean investment. BASF Korea Ltd.
BASF executives look on Korea as a base from which to make inroads into other Asian markets particularly those in Northeast of the continent, and with a special view to the possibilities presented by the eventual reunification of the Korean peninsula. A key factor in the German company's recent program of investment is the sheer potential of the Korean chemical market. The size of this market reached 20 trillion won in 1995, of which 51 percent of which was supplied by imports from Japan, the United States and Germany. BASF first set up its Korean branch in 1982. Prior to that, the company established Hyosung BASF jointly with Dongyang Nylon of Hyosung Group in 1980, and took over Hyosung's 50 percent stake for 64 billion won in February 1998. BASF also established its joint venture, Hanwha BASF Urethane, with Hanwha Chemical in 1988. It purchased Hanwha's 50 percent stake for 120 billion won in December, 1997. An outstanding feature of Ulsan's industrial infrastructure is its network of pipelines through which all production facilities obtain supplies of liquefied natural gas (LNG) plus steam heating, so enabling them to save on energy costs. Apart from the many attractions the city is able to offer, a major reason behind BASF's investments in Ulsan is its main business partner in Korea, Taekwang Textiles, is also based in Ulsan. Additionally, BASF was drawn to Ulsan by the potential benefits of inter-industry linkages and synergy, plus the easy access to resources the city offers. Equipped with a tanker terminal and port facilities, Ulsan also provides efficient, low-cost transportation for its bulk product producers such as BASF. A BASF facility taking particular advantage of this attribute is the company's THF factory in Ulsan; its annual output is 50,000 tons of which 20,000 tons is sold domestically, while the other 30,000 ton is sold overseas.
Ulsan Grand Bridge
A feasibility study and design has been completed and approved, and construction will begin during 1999. Investors may participate in the construction of the bridge and the tunnel. The expected investment amount is $127 million. Investors may participate in the project individually or as a member of a consortium with foreign or local companies. As permitted by local law, investors will be allowed to own and manage the projects which are expected to generate jointly a cash flow worth approximately $72 million per annum. Investors will also be given the right to construct the connecting bridge and roads, projects financed by the City of Ulsan. Additional incentives such as the period for managing the facilities are negotiable. An increase in the tourist trade is expected on completion, by 2002, of a resort complex and marine park adjacent to the bridge. Because a huge amount of traffic is carried on the major roads which connect the Ulsan Port and Ulsan Mipo National Industrial Complex, the Onsan National Industrial Park, and New Ulsan Port, the consequent high usage of the bridge will result in handsome profits to investors.
New Ulsan Port
The New Ulsan Port is situated on the major Northeast Asian shipping lane which links Japan, Taiwan, Hong Kong, and Singapore. Part of a national plan to build six new ports, the New Ulsan Port is expected to become a major port for trade between Korea and markets in East Asia as well as the Pacific Rim. The existing berthing facilities of Ulsan Port which can accommodate 90 vessels have been used exclusively by major companies. The new port, however, will serve as a multi-purpose cargo terminal. The Port of Ulsan currently handles 150 million tons a year through its existing 90 berths. The volume of freight has increased 12 percent annually over the past five years, the largest volume increase of any Korean port. Ulsan is currently handles the largest volume of cargo among the nation's ports, its current tonnage topping 24.5 million tons annually. However, its lack of port facilities has resulted in it losing business to international competitors, a problem the 28-berth New Ulsan Port is designed to redress. The new port's 28 berths will be able to accommodate 20,000 ton-class vessels. Its yearly stevedoring capacity will be 30 million tons including 430,000 TEU. More than $2 billion will be poured into this project until its completion in 2011. $12 million has been spent on completing the basic design and initial construction on the work wharf. Full-scale construction of the new port is scheduled to begin during 1999, commencing with its breakwater.The New Ulsan Port is expected to handle 30 million tons a year after the project is completed, with total earnings of $192 million for its private investors. Investors may participate in the construction of berths individually or in combination with foreign or local companies. Logistics and Business Centers The city has launched two initiatives to help the process of local business development. The Logistics Center will serve as a support facility for the New Ulsan Port which will be completed by 2011. Meanwhile, the Business Center will serve to promote international trade on behalf of local and national industry. The two projects will be fully financed by private capital including foreign direct investment. Investors may participate in the project individually or as a member of a consortium with foreign or local companies. Specific investment incentives are negotiable.
Foreign Investors Industrial Complex Ulsan is planning to build an industrial complex exclusively for foreign investors to be able to offer such investors new tax incentives made possible under recent legislation. Some $21 million will go to the construction of industrial facilities over 215,000 square meters, and service facilities over an additional 72,000 square meters. Companies will be able to locate in the complex as of June, 2000. The city wants to attract companies in the fields of information, communications, machinery and components, semiconductors and mechatronics. Companies which are 100 percent foreign-owned or domestic enterprises with 10 percent or more of their stock foreign-owned will be eligible to locate within the complex. Land purchase prices will be lower than those in other industrial complexes for foreign investors in Korea. Rental fees and contract periods are negotiable. Foreign companies will enjoy incentives such as cuts in local taxes and financial assistance. High-tech companies investing more than $1 million and manufacturing firms investing more than $10 million will be able to lease land free of charge. Coupled with the advantages of advanced SOC facilities, such as the Port of Ulsan, a comprehensive rail and road network, and an abundance of highly-skilled labor, the complex will provide an ideal location for a range of businesses.
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Situated in an area well-endowed with natural resources, Ulsan
City has long been a center of human habitation and activity,
as indicated by the recent excavation of relics from the
Neolithic era and the Iron Age. A combination of geographical
site and geology produced the conditions which favored
settlement and have provided the impetus which led to the
development of the modern city of today.
DuPont Korea, established in 1977, operates
plants in Ulsan and Inchon and provides
industrial resources and technological services
in the Korean market. DuPont has invested
$166 million so far into its Korean ventures.
The company completed the construction of its
Ichon plant in June 1990 for the production of
photomasks, key components in semiconductor
manufacture. It also set up a compounding
factory in Ulsan in 1991 to manufacture
engineering plastic products such as exteriors
for television sets, and other electronic home
appliances, plus basic material for gear and
valve products. Its other plant in Ulsan manufactures PVB resin sheet used for
automobile safety glass.
The pace of investment by German
companies into Korea since the financial
crisis hit in December 1997 has been swift.
Among them, BASF drew keen interest
when it took over Hanwha BASF Urethane,
formerly a joint venture with Hanwha
Chemical Corp. It also purchased the lysine
business division of Daesang Corporation
for $600 million. BASF is investing $55
million in the construction of a plant to
produce 20,000 tons of poly THF per year.
Poly THF is the base material for
polyurethane textile, a state-of-the-art
resource used in the manufacture of sports
wear. 
The construction of the Ulsan Grand Bridge and
its connecting roadways will provide a direct link
between metropolitan Ulsan and its eastern part
located on the other side of the bay which partly
divides the city. The project will alleviate chronic
traffic congestion in the downtown, while
improving the logistics for the national industrial
complexes located on both sides of the bridge.
This project consists of a 2,174 meter-long
cable-stayed bridge, a 1,040 meter-long tunnel,
and a 2,486 meter-long connecting roadway
system. A total of $235 million will be invested
in this project which is scheduled for completion by 2004.
Ulsan has several ports, all set in scenic natural
surroundings. Changsaengpo estuary was once
famous as a base for whale hunting while
Pango-jin was once a fishing harbor. Onsan
Port is the gateway to Onsan Industrial Complex
which is the leading center of Korean heavy and
chemical industry. Called Yompo Pier since the
Chosun Dynasty, Ulsan Port is one of the three
main ports of Korea. With a view to maximizing
the attractiveness of Ulsan for locating industry,
the city government began its New Ulsan Port
project, an undertaking which will result in the
addition of 28 new berths.