[fn People] "Now Is the Time for Korea's Manufacturing Sector to Transition to ESG as Productive Finance Gains Momentum"

[Financial News] "With the government and banks now channeling funds into productive finance, this is the optimal time for Korea's manufacturing sector to shift toward Environmental, Social, and Governance (ESG) practices."
Min-cheol Kim, branch manager of Woori Bank's Banwol·Siwha Biz Prime Center, said on the 17th, "When I meet with entrepreneurs running small and medium-sized manufacturing businesses, it is clear that Korean companies are already lagging behind China not only in price but also in quality competitiveness. With additional challenges such as succession, many are considering winding down businesses they have struggled to build."
Kim explained, "To overcome the harsh realities facing the manufacturing sector, now is the time for the government and financial institutions to open the flow of funds. By investing in facilities that meet global ESG standards and improving the work environment, companies can enhance their competitiveness. There was even a case where a company, previously only producing solar structure components, received consulting from Woori Bank, secured additional funding, and successfully transitioned into a semiconductor equipment manufacturing business."
According to Kim, a company in the Banwol National Industrial Complex began producing solar power plant structures in 2021. Profits were good through 2023, but in the second half of that year, oversupply and the influx of low-priced Chinese products led to losses. After receiving consulting from Woori Bank in the first half of this year, the company shifted its main products to semiconductor equipment and facilities, returning to profitability. Recently, this virtuous cycle continued as the company entrusted some standby funds to Woori Bank after successfully utilizing its loan products.
Kim emphasized, "For productive finance to take root on the ground, active participation from companies is essential. When institutional support such as expanded credit lines and lower interest rates on policy funds is provided, companies that create new jobs and enter new markets will be the ones to survive."
He added, "Some companies are closing down because there are no successors, not even among the second generation of founders. While this is less common in Banwol and Sihwa industrial complexes, the farther from the Seoul metropolitan area, the harder it is to find workers."
Woori Bank's Banwol·Siwha Biz Prime Center is located in the heart of the industrial complex, inside a knowledge industry center. The air there is filled with the lingering scent of dye from a nearby paint factory and the salty sea breeze.
Kim noted, "Since living conditions here are less favorable than in Seoul, greater support from the government and financial sector is needed. Publicizing available support is also crucial. Many business owners are unaware that, by utilizing policy funds from Gyeonggi Province or Siheung-si, they can access much lower interest rates than with conventional loans."
Previously, Woori Financial Group announced it would invest 10 trillion won in the National Growth Fund, which is to be established at a scale of 150 trillion won as part of the 'Woori Financial Future Co-Growth Project.' Over the next five years, a total of 80 trillion won will be allocated to 'productive and inclusive finance.' In line with the government's financial policy direction, the group plans to redirect funds tied up in real estate into productive areas, such as loans to companies leading industries like AI.
Kim concluded, "As the saying goes, finance is the lifeblood of industry. Just as blood must circulate to the fingertips and toes for a person to be healthy, I hope that funds will flow not only to central areas and AI or export-import companies, but also to small manufacturing businesses striving to succeed. Banwol·Siwha Biz Prime Center will also work to promote the transition to productive finance."
[email protected] Park Moon-soo Reporter