FOODPOLIS

Korea National Food Cluster (Foodpolis)Team Ministry of Agriculture, Food and Rural Affairs

FOODPOLIS INTRODUCTION

Foodpolis Overview Vision

Why Foodpolis Why Asia

Global Food industry Overview

The First Food Cluster of Korea in Northeast Asia

The Korea National Food Cluster(FOODPOLIS) is the first government-supported

food industrial complex in Northeast Asia. The complex is currently being developed by

the Korean government and its construction in Iksan, Jeollabukdo will be completed by 2016.

FOODPOLIS is planning to attract 150 domestic and international food companies and

10 research institutes. The new industrial complex of 2,320,000m² and the residential

area of 1,260,000m² will serve as both a platform for the food industry and a cultural

hub.

[A Bird’s Eye View of FOODPOLIS]

Korea occupies a central location in Northeast Asia and within the greater Asia Pacific

region, with easy access to the Northeast Asian food market and its 1.5 billion consumers.

This proximity to major regional markets alone will give your business a distinct advantage.

FOODPOLIS will be home to global companies and research institutes, and serve as an ex

port platform to the region, with next generation food processing and food packaging techno

logies driving growth and opportunity. FOODPOLIS will increase the value of the food

industry overall by creating a more advanced industrial structure and enhancing global

competence and competitiveness.

FOODPOLIS OVERVIEW

FOODPOLIS Will be the leader of Northeast Asia Market

[A Bird’s Eye View of FOODPOLIS]

❶Gateway Foodpolis

!  Matching system for raw material procurement, focuses on both contract manufacturing

!  Coevolutional environment between small businesses and major corporations by R&D collaboration marketing of

raw material procurement, etc

!  Growth of agricultural food industry through the 6th industrialization involves the experience display, festivals, and tourism.

!  K-Food globalization by exhibiting ‘Food-themed’ Expo

!  Global high-valued food exportation center by installing inspection-examination office for exportations

!  Exploration of overseas market through residing company’s participating exhibitions, marketing programs, etc !  Innovative distribution system by securing exclusive foreign distribution channels and corresponding distribution

companies

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!  Low-cost & high-valued manufacturing system: knowledge-based R&D through open site-equipment management

!  Research complex: Food technology·IT·Nanotechnolgy·Robotics merge as the one system

!  Innovative values through networks collaborative R&D with domestic international food research institutes

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!  Smart food industrial complex: based on the finest transportation-distribution, Industrial water/ IT,Green energy system

!  Global Food Cluster: for about 160 domestic and international food corporations and research centers

!  Settlement environment: for employees’ residential, educational, and cultural lifestyles

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VISION

1 Geography

WHY FOODPOLIS

! Has access to 60 major cities with more than 1.5 million population in a two hour flight range

! A transportation hub that enables one day travel to China, Hong Kong and Japan

! Rapidly emerges as a major logistics zone in the world along with Europe and North America

!  Is located in the area that is safe from natural disasters

Korea’s Trade Volume (2013)

2 Economic

The 9th Biggest Trading Partner in the World Korea becomes the world’s 9th biggest trading partner in 2013. The country’s annual trade volume exceeds over one trillion USD for three years in a row.

500 Export Import

Free Trade Agreement Brings New Market Opportunities The Korean government concluded 9 FTAs with 51 countries that represent the EU, ASEAN and USA and these countries collectively account for 61% of global GDP, 46.2% of global trade and 39.7% of the global population. South Korea is one of the biggest nations that has signed and in negotiation for FTAs with foreign countries. When basic materials are imported from an FTA-partner country and processed goods created from the materia ls are exported back to that country, the goods are eligible for tariff exemptions and other benefits.

525

550

575 *Unit: billion dollar

Effective & Concluded FTAs Negotiating

Source: The Korea International Trade Association (KITA), 2014

Preparing for negotiations & joint research

•  Canada (2014) •  Columbia (2013) •  Australia (2013) • U.S (2012) •  Turkey (2012) • EU (2011) • Peru (2011) • India (2010)

•  Indonesia •  China •  Vietnam •  RCEP •  New Zealand •  China· Japan

•  Japan •  Mexico •  GCC •  MERCOSUR •  Israel •  Central America •  Malaysia

KOREA with

• ASEAN (2009) • EFTA (2005) •  Singapore

(2004) • Chile (2002)

WHY FOODPOLIS

559

515

3 Infrastructure & Facility

6 Business Support Facilities

◆  Food Quality & Safety Center It examines the suitability of tool with legal standard for food to be released into market and relays the result to the company.

◆  Food Functionality Evaluation Center

It develops functional materials for food and evaluates the functionality and safety of foods. It also provides training and consulting services throughout specified processes.

◆  Food Packaging Center It protects food with guaranteed safety making customers can enjoy its full taste and flavor without any compromise. In addition, it provides multi-faceted supports in analysis, testing, R&D, education and consulting regarding issues.

◆  Pilot Plant

Produces prototypes and trials and establishes a world class pilot plant

◆  Rental Plants Provides production space at a reasonable cost for food companies

◆  Agency for Korea National Food Cluster Provides comprehensive services with permanent step and serves as a networking coedinator between local & global businesses and laboratories

WHY FOODPOLIS

WHY ASIA

1 The 2nd Largest Food Market - Asia

10%

‘08 ‘11 ‘15

‘08 ‘11 ‘15 ▶ Although the EU food market is still the largest, it has been declining since

2008. Only Asia –Pacific food market has been experiencing continuous growth. With this rate of growth, Asian market will soon exceed the size of the European food market.

Source: DATAMONITOR (2012.5), 2011,2015 data are estimated

North America

‘08 ‘11 ‘15

‘08 ‘11 ‘15

‘08 ‘11 ‘15

Latin America

2.8 % Middle Asia

Africa

•  China has the world’s largest population and potential food market •  Japan is one of the world’s top economies and consumes high-value foods •  Korea has the most westernized life style and easily adopt new and

innovative products. Due to the country’s economic development and growth of its vibrant trade with other countries, South Korea has expanded its free trade partnerships with 51 countries.

•  China has the world’s largest labor market, which is cost-effective •  Japan has the more skillful labor market •  Korea is ranked 5th globally in terms of manufacturing productivity and has been

benchmarked by the OECD for its high levels of workforce collaboration, work ethic, and higher education race

•  Chinese consumers have a stronger tendency to have a meal outside •  Busy lifestyle requests more of pre-processed/packaged foods in Japan •  Korea has one of the world’s most advanced cold chain systems, leading more

consumption of high-value packaged foods

2 High potential for food industry in Northeast Asian countries

Diverse & Balanced Consumer

Labor Pool

Packaged Food

WHY ASIA

1 Increasing Global Food Market

4758.8 4888.3

5057.2 5237

5430.2

5636.8

5856.4

6077.3

3000

2000

1500

4000

5000

6000

2008 2009 2010 2011 2012 2013 2014 2015

Global food Industry

2450 2537.5

2631.7 2730.9

2834.5 2943.3

3056.9 3172.3

1000

2500

3000

3500

2008 2009 2010 2011 2012 2013 2014 2015

Unit: billion USD

Global Processed Food Industry Unit: billion USD

Source: DATAMONITOR (2012.5), 2011~15 data are estimated

GLOBAL FOOD INDUSTRY OVERVIEW

▶ Global food market will exceed 6 trillion USD by 2015 ▶ Global processed food market has been experiencing contin uous average growth of 3.8% since 2008

Bigger Population numbers

!  Rise in income and middle class in e merging markets (China, Brazil etc.) cause: ! Increase in processed food consumption ! Increase in dining out ! Expansion of market for convenient

and processed food ! Increase in consumption of meat and

dairy product

Increased consumption in emerging markets

!  Convergence with pharmaceutical and bio industry, enlarging the industry’s d omain : obesity prevention product, dis ease prevention product, anti-aging pr oduct etc.

!  Rising interest in healthy functional food and food safety

2 Global Issues that Drive Food Industry

!  Global Population increases by 75 million people each year : Increase in total grain consumption

!  Consumption pattern will also change – More meat, grain and animal feeds are needed

!  Vitalization of food development to solve food shortage problem

!  Developed countries like USA and EU countries expand use of bio-energy : A mount of grain specified for bio-energy increases

Increased grain consumption for bio-energy

Expansion of applied practice

GLOBAL FOOD INDUSTRY OVERVIEW

FOODPOLIS QUESTIONS & ANSWERS

Foodpolis, or the Korea National Food Cluster, is a food industrial complex and a cultural food center designed to create business and research opportunities in the global food industry. It will be home to companies and research institutes and serve as an export platform to the region, with next-generation food processing and food packaging technologies.

The joint project between the Ministry of Agriculture, Food and Rural Affairs (MAFRA), North Jeolla Province and Iksan City is located in the heart of Asia, a three hour drive from Seoul and within a two hour flight from 1.5 billion people. It will offer multinational food companies and research institutes growth potential in the key Asian markets, which are responsible for approximately 32 percent of global food consumption.

Foodpolis will create opportunities to research and develop “future foods” that will improve global agricultural practices and public health. It is the first project of its kind in Asia to address the ongoing issues of food safety, food shortages, and put an emphasis on providing a healthy future for Asia and the world.

Korea National

Food Cluster

What is Foodpolis?

Healthy Future Food

Joint Project

Foodpolis will provide an advanced industrial structure that will power growth in the global food industry. It is intended to provide the world’s leading food companies, research centers and food industry professionals a platform to develop and manufacture food products and research today’s most complex food problems.

When construction is complete in 2016, the cluster aims to serve as a destination for agro-food, food processing and packaging companies seeking to break into the Asia Pacific region

Foodpolis aims to be one of the world’s top five food clusters and a global hub of the world food industry, with 150 tenant businesses, 10 research centers, and 22,000 employees.

Advanced Industrial Structure

What are the goals of Foodpolis?

Top 5 Global Food

Cluster

Destination For

International Food

Companies

Food companies and food industry professionals interested in expanding to the Asian market will benefit from the project’s location and can use Foodpolis as an export base. Companies joining the cluster will also benefit from job creation along with those located in the North Jeolla Province.

The economy in South Korea will benefit from Foodpolis driving growth to the international food industry.

Consumers will benefit from food that is safe and healthy. Investors will benefit from the growing number of wealthy consumers and the demand for higher-quality food items.

Food Industry

Who will benefit from Foodpolis?

Consumers &

Investors

Economy

Foodpolis was launched in an effort to tap into a massive market opportunity in the North Asia region, which comprises roughly 1.5 billion people and one of the world’s most dynamically growing economies.

Foodpolis was inspired by similar R&D and manufacturing clusters around the world, including Food Valley in the Netherlands.

There is a strong regional demand for food that is safe and healthy. Foodpolis will have an established support network including three research centers: the Food Functionality Evaluation Center, Food Quality and Safety Center and Food Packaging Center.

Market Opportunity

In North Asia

How did Foodpolis come about?

Demand For Safe

& Healthy

Food

Inspired by

Global Food

Cluster

How will Foodpolis address food safety worldwide?

Iksan City is known as the agricultural heartland centrally located near major air and sea port facilities, putting 49 cities of more than one million people within easy reach. It is also in close proximity to other national projects including the Saemangeum Project, the Jeonju Innovation City, and the Sejong City and the prestigious Daedeok Research Complex.

There are a number of vocational schools and universities in the North Jeolla Province, providing a pool of highly-educated students for work and research.

Iksan is the nation's main grain-producing region, with a rich supply of raw food materials. The strategically chosen location will be a unique place for leading food companies, labs and food industry professionals to come together to raise the global profile of the country’s food industry.

Great Location

Why is Foodpolis located in Iksan City?

Uniqueness

Highly educated workforce

The Industrial Center will include an enterprise support zone featuring three R&D centers, rental plants and pilot plants; a private research zone with 10 food research institutes; a foreign investment zone, a logistics & distribution zone, a general food zone and waste treatment facilities.

The Residential District will feature a housing zone, a commercial food zone, universities and educational facilities, a food museum and a food theme park.

Industrial Zone

What will be on the site?

Residential Zone

Foodpolis so far signed total of 99 MOUS with 51 international companies from 14 different countries and 47 domestic companies.

High Numbers of MOU Singed

How does international and domestic companies think about Foodpolis?

The goal is to have the industrial and residential districts completed by 2016, with the construction of apartments, schools and commercial properties beginning shortly after that.

Foodpolis is in an optimum location for distribution in the heart of Asia within close proximity to the world’s most densely-populated regions and nations including China and India. The quickly emerging economies in Southeast Asia are also only hours away including Singapore, the Philippines, Malaysia, Indonesia, Vietnam and Thailand.

Industrial And

Residential zone

When will construction be completed?

Overseas Expansion

What are the benefits for [participating] distribution networks?

The total budget earmarked for the project exceeds 500 million dollars, with contributions coming from the central government ($137m), local governments ($63.4m), and the private sector ($353m). Total available budget for the R&D center construction is 32.3 million dollars

Total of 3,580,000�2    (358ha) -  R&D-oriented industrial complex - 2,320,000�2(232ha) -  Residential complex - 1,260,000�2    (126ha) -  6 supporting centers site share is approximately 4.1% of entire area

Budget

What is the total budget and size of Foodpolis?

Land

Though total land area is 358ha, Foodpolis is positive on expanding the land if there are high demands from companies and investors. The additional industrial zone will be placed on the southern part of the initial industrial zone The 2nd industrial zone is about 304 ha

Land Expansion

FOODPOLIS MEDIAPERSPECTIVES

REFERENCE

China Food Manufacturing Journal

Korea Establish New Pivot of Global Food Market Interview with Ahn Chang-geun, Ministry of Agriculture, Food and Rural Affairs, Senior Deputy Director of Korea National Food Cluster Division General and Lee San-Jai, Director General of Foodpolis Promotion Assistance Agency. The concept of Food Valley is from Netherland which stands for a cluster consists of food and nutrition research institutes and enterprises with advanced processing technology. There are some well-known Food Valleys all around the world. Fortunately, a Food Valleys will be established in Korea as the first national food cluster (Foodpolis) of Northeast Asia in the near future. All construction is expected to complete by 2015. To better understand its purpose, background and the vision, we interviewed Ahn Chang-geun, Ministry of Agriculture, Food and Rural Affairs, Senior Deputy Director of Korea National Food Cluster Division General and Lee San-Jai, Director General of Foodpolis Promotion Assistance Agency.

China

REFERENCE

Hong Kong Economic Times

Korean Food Cluster Welcomes Enterprises from Japan, China and HK The Korean government launches Foodpolis aiming for the huge Northeast market. By providing taxation exemption, grants and other favorable policies, it welcomes investment from China, Japan and HK. Together with supporting centers, R&D centers, logistics and distribution service, Foodpolis will create 23,000 job opportunities and $ 4 billion’s business growth. Foodpolis is still in the construction and is expected to start operation in 2015. Besides, K-food is recognized in the international community for its high quality and safety. Foodpolis will attach great importance to supervision on food processing by providing technological assistance, enhancing the competitiveness of Chinese companies.

Hong Kong

REFERENCE

Hong Kong Commercial Daily

Korean Food Cluster Attracts Mainland China and HK Capitals The increasing sense of food safety becomes a great business opportunity. The Korea government therefore launches a national food cluster—Foodpolis and welcomes enterprises with interest. The Korea government will offer tax exemption, grants and supporting service, etc. By 2015, all infrastructures will be completed. Food safety is one of the most important challenges all over the world. Enterprises can utilize facilities and management measures provided by Foodpolis to ensure the safety of food. Korean government will continuously promote Foodpolis. For instance, Foodpolis will proactively attend SIAL.

Hong Kong

REFERENCE

China Food Newspaper

Chinese Companies Uses Korean Technology to Boost Its People’s Confidence in Food Safety In present, Food safety has been a great concern to the whole world more than ever. Besides strengthen management and improve processing technology, companies may use advanced quality system to create high quality goods. Korean national cluster leaded by the government is aim to attract more than 160 food enterprises and research institutes domestically and abroad.

China

REFERENCE

China Daily

China Food Firms Look Abroad to Improve Image South Korea seen as a springboard for companies to explore the international market and win consumers' confidence on safety issues, reports Lyu Chang in Seoul. Details on their investments have yet to be worked out, said an official in charge of overseas investment at the State-owned agency for Foodpolis, but these companies have all signed memorandums of understanding with South Korea's Ministry of Agriculture, Food and Rural Affairs. http://usa.chinadaily.com.cn/epaper/2013-12/17/content_17179439.htm

China

REFERENCE

China Daily

China Food Firms Look Abroad to Improve Image Other Chinese companies said they are simply planning to use South Korea as a springboard for easy access to Korean and global markets. Details on their investments have yet to be worked out, said an official in charge of overseas investment at the State-owned agency for Foodpolis, but these companies have all signed memorandums of understanding with South Korea's Ministry of Agriculture, Food and Rural Affairs.

China

REFERENCE

Food Safety News

http://www.foodsafetynews.com/2013/12/korea-wants-to-spread-the-use-of-jang-around-the- world/#.U60wJJSSx1c

U.S.

REFERENCE

Food Safety News

http://www.foodsafetynews.com/2013/12/asian-milk-company-goes-above-and-beyond-for-korean- mothers/#.U60wIpSSx1c

U.S.

REFERENCE

Food Safety News

http://www.foodsafetynews.com/2013/12/korea-grows-national-food-cluster-around-new-food-safety- center/#.U60wKZSSx1c

U.S.

REFERENCE

The Grocer

http://www.thegrocer.co.uk/fmcg/gateway-to-china-koreas-export-push/354269.article

U.K.

REFERENCE

The Grocer

U.K.

REFERENCE

The Grocer

U.K.

PR CONSULTING GROUP " Tel: +82 511 8587 "  Email : foodpolis@commkorea.com

AGENCY FOR KOREAN NATIONAL FOOD CLUSTER

" Tel: +82 507 8264 "  Email : investfood@foodpolis.kr "  Official Homepage: www.foodpolis.kr