A birds eye view of Hyundai Mobis plant in Ulsan.
Hyundai Mobis Co., auto parts unit under South Koreas Hyundai Motor Group, on Wednesday broke ground for an environmentally-friendly vehicle parts plant in the southern coastal city of Ulsan in what would be the biggest reshoring case in Korea.
Hyundai Mobis plans to invest about 300 billion won ($247 million) in the factory from September to build an environmentally-friendly vehicle parts plant that is capable of churning out electric vehicle battery system for 100,000 cars a year. The company plans to begin mass production from 2021, with hopes to meet growing demand amid various government policies to help boost electric car use and cope with global market growth.
Hyundai Mobis plans to focus its capability on production technology and independent research development by having its environmentally-friendly vehicle parts plant in Chungju, North Chungcheong Province, as well as the Ulsan plant as an advanced base for the production of key components for future vehicles. To realize the plan, the company signed a memorandum of understanding with the Ministry of Trade, Industry and Energy and Ulsan Metropolitan City on the Ulsan plant investment.
The groundbreaking ceremony on Wednesday was attended by President Moon Jae-in, who promised governments active support to companies returning home.
South Korean President Moon Jae-in makes an opening remark at the groundbreaking ceremony of Hyundai Mobis environmentally-friendly vehicle parts plant in Ulsan on Wednesday. [Photo by Lee Chung-woo]
According to the Blue House, Hyundai Mobis is the biggest name complying with the state reshorting initiative under the U-turn act of December 2013 aimed to draw back local companies to home turf.
According to Korea Trade-Investment Promotion Agency (KOTRA), only 61 companies returned home from 2014 to June this year, which includes 59 small- and mid-size enterprises and two mid-size enterprises. Among them, 56 companies packed out from China, three from Vietnam, and one each from Bangladesh and Canada.
Five auto parts makers, meanwhile, signed a memorandum of understanding with KOTRA on investment support at home. Donghee Industrial Co., Dongnam Precision Co., Sewon Precision Industry Co., Sejin Industrial Co., and Seoil Co. that all have factories overseas plan to return home and invest a total 64 billion won to build additional facilities starting in the second half of this year in Ulsan, North Gyeongsang Province, South Chungcheong Province, and Incheon in Gyeonggi Province. Total investment when adding that of Hyundai Mobis will reach 364 billion won, KOTRA said.
By Park Yong-beom and Lee Eun-joo
[ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]
