Hub of the parts materials industry in

Hub of the parts & materials industry in Northeast Asia Pohang Parts & Materials Industrial Complex

Ⅰ Establishment of the Pohang Parts & Materials Industrial Complex Ⅱ Favorable geographic location Ⅲ Investment incentives Ⅳ Competent human resources and stable labor-management relations

1. Establishment of the Pohang Parts & Materials Industrial Complex

1. Establishment of the Pohang Parts & Materials Industrial Complex Heart of Korea’s auto parts industry, spreading over Daegu, Gyeongju and Ulsan Center of Korea’s IT and LED industries Realization of integrated logistics systems IT, LED 부품단지 using marine, railway and road transportation due to the completion of Yeongil New Port - Feeders: Kobe, Vladivostok, Jining, Hong Kong, Singapore and Busan - Trans-shipment: hub port for Europe, America and Australia; connected to the TSR 자동차 부품단지

KOREA 浦項市 포항시 JAPAN HUB (미주, 호주) HUB CHINA HUB(EU)

1. Establishment of the Pohang Parts & Materials Industrial Complex Opening of Pohang Port in 1962, construction of Posco headquarters in 1968 Postech, a research-oriented university, creation of research support clusters Pohang Parts & Materials Industrial Complex adjacent to the port Free provision of a 32 -km long road Establishment of the basis for railroad transportation between Yeongil New Port and the Seoul National Capital Area, optimal access to markets - Short-term: operation of shuttle buses to Hyoja and Goedong Station - By 2012: construction of a 12. 2 -km long railway within the complex (port)

月浦駅 월포역 東海中部線 동해중부선 7 迎日新港湾 영일신항만 浦項~大邱高速道路 포항-대구간고속도로 31 POSCO 国道 31号線 31 국도31호선 浦項空港 포항공항 포항-울산간고속도로 浦項~蔚山高速道路

1. Establishment of the Pohang Parts & Materials Industrial Complex Location: within the Yeongil Industrial Complex I, Heunghae-eup, Pohang City Area : 330, 000 ㎡ Move-in date: starting June 2009 Fields: high-level technology related business and parts and materials manufacturer

1. Establishment of the Pohang Parts & Materials Industrial Complex 2 hours and 10 minutes to Seoul by the Gyeongbu KTX Line 3 hours to Incheon International Airport by KTX and airport express (2010) 1 hour and 20 minutes to Gimhae International Airport (shuttle bus: 16 times per day ) 20 minutes to Pohang Airport (50 minutes between Pohang and Gimpo Airport) Daegu, Gyeongbuk and Ulsan: 1 to 1 ½ hours via highway Seoul National Capital Area and Uiwang ICD: 6 hours via rail; 5 hours via highway * Long distance rail transportation can reduce costs by 50%, compared to the use of cars. Yeongil New Port: 10 minutes

서울역 환승 의왕컨테이너기지 40만평 공항민자철도 인천 - 서울역 (45분/10분간격) 삼천-포항 동해중부선 경부 KTX 신선 동해중부선 청하월포역 서울역 ~ 신경주역 1시간 55분 / KTX 신포항역~영일만항역 항만인입선 12. 2㎞ 괴동역(포철) 신경주-신포항간 15분 / 셔틀연결 서울역~포항간 : 2시간 10분 인천HUB 공항 ~ 포항간 : 3시간

1. Establishment of the Pohang Parts & Materials Industrial Complex Access to cities around the world from Yeongil New Port Feeders: Kobe, Vladivostok, Shanghai, Singapore and Busan Trans-shipment: hub port connecting to America, Australia, and Europe; connected to the TSR ※ Adoption of made-to-order systems, curtailment of logistics expenses Marine city along the East Sea Adjacent to Gyeongju, an international tourist destination (30 minutes) Provision of medical welfare services and leisure and cultural facilities Homigot, Bogyeong Temple and Jukdo Fish Market Jigok Complex with Korea’s highest quality of living

2. Favorable geographic location

2. Favorable geographic location A leader in the steel, solar energy and fuel cell sectors Research Institute of Industrial Science & Technology, specializing in materials research Pohang Technopark (1995), Korea’s first private sector-driven technology complex constructed in local cities Concentration of the solar cell parts and materials industry Fuel cell company and velocity tower manufacturer

2. Favorable geographic location Postech and research centers Asia’s best research university, a technological leader National Center for Nanomaterials Technology, developing semiconductors and display technology Pohang Institute of Industry Advancement in the field of parts and materials technology New & Renewable Energy Center and Biotechnology Institute

2. Favorable geographic location Synergy with existing industrial complexes Pohang National Industrial Complex: 9, 070, 800㎡ Posco-related Industrial Complex I-IV: 267 corporations; 12, 458, 000㎡ Cheongrim Industrial Complex: 4 corporations; 588, 000㎡ Agricultural-industrial complex: 22 corporations; 9, 195. 400㎡ A total of 7 complexes; 294 corporations; 22, 438, 000㎡ Pohang Technopark: 54 corporations Separate location: 544 corporations

2. Favorable geographic location New industrial complex Namgu National Industrial Complex: 9, 279, 000㎡; Korea Land Corporation Yeongil Industrial Complex I-IV: 6, 337, 000㎡; Pohang City Pohang Technopark II: 2, 915, 000㎡; SPC 경제자유구역 Cheongha Solar Energy Parts Complex: 825, 000㎡; pertinent operator Expansion of a foreign investment zone through designation as a free economic zone Industrial district, convention district, education district and residential district foreigners; 3, 750, 000 ㎡ in area Available to house foreign investment support centers and manufacturing facilities

2. Favorable geographic location Cultivation of a global logistics hub through designation as a free trade zone Support for logistics and manufacturing by granting exceptions for laws on foreign trade and customs (709, 000㎡) Direct access to overseas markets through Yeongil New Port Scale: 4 berths for 30, 000 -ton vessels Capacity: 240, 000 TEU per year Date of opening: August 8, 2009 Route: Japan, Russia, China and Southeast Asia; trans-shipment for America- and Europe-bound merchandise Domestic: railroad between Pohang and Seoul (6 hours)

3. Investment incentives

3. Investment incentives Qualifications: registered foreign-invested company, in which foreigners invest more than 30% of the total amount invested Investment period: for 5 years from the move-in date Rental period: 50 years; 1 -time extension (a maximum of 100 years) Rental fees: 1% of the site value; 1, 968 won per ㎡ per year - High-level technology related business securing a total investment of $US 1 million: exemption - Manufacturer securing a total investment of $US 5 million: 75% discount

3. Investment incentives National tax (corporation tax and income tax) - High-level technology related business: exemption for 5 years; 50% reduction for the next 2 years - Manufacturer securing a total investment of $US 10 million: exemption for 3 years; 50% reduction for the next 2 years Local tax (registration tax, acquisition tax, property tax and land value tax) - High-level technology related business and manufacturer securing a total investment of $US 10 million: exemption for 15 years Customs - 3 -year exemption for capital goods

3. Investment incentives Assistance in the form of cash or subsidy for facility installation - When equipment costs exceed 3 billion won; within 0. 03% of total equipment costs; a maximum of 5 billion won Subsidy for employment (when hiring more than 20 new employees; a maximum of 0. 3 billion won) - 500, 000 won per extra person per month within 6 months Subsidy for training (when hiring more than 20 new employees; a maximum of 0. 3 billion won) - 500, 000 won per capita per month within 6 months

3. Investment incentives Infrastructure - Road, water supply and drainage, power and LNG gas - 2 -km distance from the port, railroad entering the port Administrative support - International school - One-stop services covering the process of project manager assignment, consultation and plant operation

4. Competent human resources and stable labor-management relations

4. Competent human resources and stable labor-management relations Independent private school (Pocheol High School) - Quality educational environment that contributes to nurturing eligible personnel - Attraction of Siemens’ Asian production base at the Pohang Technopark Globalization programs at Handong Global University, Handong International School Graduates from technical high schools and colleges: 5, 600 per year Number of R&D masters and doctoral degree holders: 2, 700 Number of residents living in areas within a 1 hour distance: 52 billion (abundant human resources)

4. Competent human resources and stable labor-management relations First declaration of labor-management-government cooperation in Korea Promise of full cooperation among labor, management and the government in January 2007 Creation of a business-friendly environment by harmonizing labor and management

Yeongil New Port will offer easy access to domestic markets through railroads and will connect 5 oceans and 6 continents by the use of marine transportation. An innovative global hub, the Pohang Parts & Materials Industrial Complex, boasting made-to-order systems, will ensure your business success. Mayor of Pohang City, Park Seung-ho