Chungcheongnam-do

TANGJONG, Chungnam Province _ Men and women wander around a two-story glass showroom containing a model apartment from the “Trapalace” apartment complex, under the shadow of dull, monstrous 16-story factory buildings. The visitors, all workers at the factories, are there to check out the interior of the houses before a draw to be held next Saturday for the right to purchase one of the homes.

“It is very popular among employees. I am going to submit an application this week as well,” said a Samsung Electronics employee who accompanied reporters during a tour of the complex. “The draws will be held three times to give everyone a chance. We have to live there for five years and then we are free to sell it,” she said.

The strategy to grow with the Cheonan and Asan community
Samsung is constructing 3,800 top-end apartments scheduled for completion in February 2009 on its vast factory site in Tangjong, which is about an hour from Seoul by KTX express train. The 20 apartment buildings will be between 32 to 39 stories, and also shopping centers, schools and a swimming pool will be built there as well.

The apartments, which have three to five bedrooms, will be sold at around 6.8 million won per pyong (3.3 square meters). That means a 32-pyong basic unit will be priced at around 200 million won, an attractive price for such a well-furnished high-rise apartment.

Head of Samsung’s LCD business Lee Sang-wan says that the construction projects are for the benefit of some 6,000 workers who produce 1 million sheets of liquid crystal display (LCD) panels every month in the factories.

“It is one of our efforts to settle down here,” Lee told reporters. “We have come down to a local province, and we have built an industrial complex. Now we want to lure talented workers here and to reduce their discomfort.”

Visions of an industrial complex city
Samsung, one of the world’s largest electronics makers, has most of its factories located at least one or two hours away from Seoul. Like any other company in the manufacturing industry, getting appropriate employees for the factories in those underdeveloped regions has been a constant headache. And Samsung believes building ritzy apartments for them can be a solution.

However, some view the construction of the apartment complex as a cover-up for Samsung speculating in real estate, with critics saying Samsung is planning to make a profit from it.

“Samsung got permission to buy the land by saying it was going to build dormitories for factory workers,” said Lee Jung-yong of Time, a real estate agency nearby. “But they silently changed it into a top-end apartment complex. Realtors are very curious about how they were able to do that.”

It has been a year long plan of the Samsung Group to build a so-called corporate city in Tangjong. It purchased a total of 1.25 million pyong, or 4.13 square kilometers, of land to develop an industrial, residential and commercial complex. The land was mostly covered with grape farms before.
Until recently, Samsung seemed to have dropped the plan as civic organiza- tions and some politicians opposed it. They criticized that Korea’s largest conglomerate was trying to speculate with rising land prices and the government should not overlook it.

The best city based on the win-win strategy between Chungcheongnam Province and Samsung
Now with the public paying less attention to it, Samsung is quietly re-starting the multi-trillion-won corporate city project with the construction of the apartments, said Lee of the real estate agency.

Along with the residential area, Samsung is helping Chungnam Province build a foreign-language high school there, which will open in March 2008. Samsung paid 24.4 billion won which includes both the land and construction.

“As the educational environment improves in the future, expectations are high for those apartments in the LCD complex,” realtor Lee said. “I think the price will rise to as much as 8 or 9 million won per pyong in the end.”

 

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Countdown Starts for Mass Production of 50-Inch LCDs

Samsung Electronics expects the LCD market to grow by some 40 percent in 2007 despite unfavorable seasonal factors in the first half of the year.
The company also said it will be able to start production at its 8th-generation factory as early as next summer, two to three months ahead of its original plan. Samsung is building the new manufacturing line in partnership with Sony of Japan, and is going to produce 50-inch TV panels in it.
“There was little rainfall so the construction is outperforming our plan. We have good conditions for an early start-up,” Lee Sang-wan, president and CEO of Samsung’s LCD business.
Lee predicted that the 50-inch TVs will be a new market standard after 2008, when the model price will be lowered by as much as $1,000. The new eighth-generation line will use bigger glass panels, enabling makers to produce more LCD panels and boosting efficiency.
Samsung and Sony have been operating a joint venture company ‘S-LCD’ in Tangjong, Chungnam Province. They split the glass made from the factory half and half.
Lee predicted that only five makers will survive in the market after a few years. These will include Samsung and LG.Philips LCD of South Korea, and Sharp of Japan.