Traditional fermented foods have been recognized for their nutritional excellence and are high value-added foods of which exports are likely to expand. Despite its rapid growth, however, the scale of the traditional fermented food industry is still small and its investment in R&D has not been sufficient in comparison to other countries. In order to develop the traditional fermented food industry into a high value-added food industry, it is necessary to develop mid-/long-term plans to foster the industry and establish an industrial complex for traditional fermented foods. In this report, the validity of the plan to establish an industrial complex for Kimchi and related foods is examined through a joint research among industrial, academic, research and government organizations including the World Institute of Kimchi.

Through the technical analysis of possible locations for the complex, Gwangju Kimchi Town was selected as the best location for being close to the World Kimchi Research Institute and having accessibility to metropolitan cities through Honam Expressway and Gwangju Airport. Furthermore, it was revealed that the subject land was owned by Korea Land and Housing Corporation and thus could be purchased for the complex development without particular administrative procedure. For the land being on a mild slope, it would save the cost of developing the complex.

The analysis of economic feasibility of developing the industrial complex for Kimchi and related foods showed that both Plan 1 and Plan 2 would be profitable but Plan 2 had higher B/C value than Plan 1. In terms of benefit versus cost, both plans assumed the percentage of new investments as 67%, so efforts to attract active investments would be much needed in the future. If not many enterprises would want to move into the complex, the profitability would decrease. The analysis in this report assumed the pre-culture and management system, which was the Kimchi Research Institute's investment in R&D, as an external effect and took only the benefits but not the costs into consideration. Therefore, in the future when the Kimchi Research Institute makes additional investments in R&D, B/C ratio would likely increase.

In order to develop an industrial complex for Kimchi and related foods, it is necessary to operate a task-force (T/F) team to reinforce regulatory and administrative support and to establish a project implementation strategy to proactively cope with expected future changes in the domestic and the international circumstances. It is desirable for the complex to be developed jointly by the public and the private sectors. Furthermore, it is necessary to prepare plans to raise the funds from private investments. For this, public relations activities including local investments seminars should be carried out and the municipal regulations of Gwangju Metropolitan City on private investments should be improved. In the mean time, other efforts to develop a proper environment for the complex, including deregulation and simplification of the procedure for obtaining permits and/or licenses, should be made.

The industrial complex for Kimchi and related foods should be developed centering on enterprises capable of manufacturing high value-added products using advanced science and technology, with the World Institute of Kimchi as its control tower for R&D for Kimchi. It is necessary to establish objectives to be accomplished for each phase and to implement the project phase by phase. In addition, it is necessary to carry out the preliminary survey about the operation of the industrial complex for Kimchi and related foods and about the enterprises which are moving into the complex and their demand for R&D and technology transfer. Furthermore, it is essential to establish "Fermented Food Cluster Support Center (tentative)" which will be in charge of planning the human resources development and supporting and managing the administrative services for the enterprises to be moving into the complex.

Successive development of the industrial complex for Kimchi and related foods requires many enterprises involved in Kimchi and micro organic ventures to move into the complex and create synergy effects. For this to happen, Gwangju Metropolitan City should actively implement strategies to attract enterprises to the complex.

Researchers: Ji-Hyeon Choi, Kyei-Im Lee, Yoon-Hyung Kim,
Researchers: Hae-Choon Chang, Dong-So Lee
Research period: 2012. 7. - 2012. 11.
E-mail address: jihchoi@krei.re.kr