Business Partnerships Lead to Environmental Improvement

By Chi Sun Lee, US-AEP

Known as the "second most aggressive" country in business after Japan in the early 1990s, Korea achieved remarkable economic growth under an export-oriented economic policy. However, this growth has come at an environmental cost that is now well recognized. Environmental policy was not integrated into Korea�s industrial policy in the early stages of its developmental push. The United States faced a similar dilemma at the height of its own industrial growth. It promoted the creation of strict environmental regulations and a corresponding branch of industry, which provides environmental technology, equipment, and services to meet those regulations. Billions of dollars have been spent cleaning up the pollution and upgrading existing factories to meet the standards. The United States is now in a position to share the lessons it has learned with Asia. As Korea begins to recover from the economic crisis, it can use these environmental technologies to build a more efficient, cleaner industrial base.

In 1992 the US government created a new program called the United States-Asia Environmental Partnership (US-AEP). The program combines the resources of many governmental organizations to address environmental problems in 10 key Asian economics. US-AEP/Korea has many programs in place to help American and Korean firms pursue environmental projects and business relationships and to promote clean technologies and pollution prevention.

US-AEP opened an office in Seoul in 1993, when environmental issues stated to draw attention from both the governmental and private sectors. The US-AEP office helps Korean firms assess their needs in terms of the reduction of water and air pollution and solid and hazardous waste, and then identifies U.S. companies that can supply the answers. A database of more than 2,200 U.S. environmental technology firms interested in doing business in Asia is searched to identify a company with the right credentials to match. Since the establishment of the office, more than 850 trade leads from Korean companies have been processed.

In addition, US-AEP�s Environmental Exchange Program (EEP) activities have provided Korean representatives from both the government and private sectors with a broad range of technical familiarization and training through courses and exchanges in the U.S. and Korea. Business partnerships have also been formed. For example, in 1996, US-AEP/Korea and the EEP team brought officials from Samsung�s Hankook Tire Co. to visit incineration facilities in the United States and learn about how the available technologies could meet their needs. This trip resulted in a US$2.1 million tire incineration equipment sale to Samsung Heavy Industries Co., Ltd., from Consumat Systems, Inc. of Richmond, Virginia. This year, an exchange brought representatives from the Taedok Institute of Technology to the National Pollution Prevention Roundtable�s spring conference in Cincinnati, Ohio to learn more about pollution prevention and clean technology and to network with colleagues with similar interests. A pollution prevention roundtable may also be formed in Korea to provide a forum for discussing and promoting the pollution prevention concept. In total, 166 exchanges to and from Korea have been conducted under US-AEP auspices.

There are several leading environmental/trade shows in the U.S. that showcase the most advanced technologies and services in various environmental fields: the Air and Waste Management Association (A&WMA) Annual Meeting and Conferences, Waste Expo, and the Water Environment Federation�s (WEF) Annual Conference and Exposition. US-AEP organizes and escorts Korean delegations to these events to provide them with the opportunity to tap into the latest environmental technologies and information and to network with professionals in the field from all over the world.

Although these trade fairs give Korean business executives access to cutting-edge technologies, they are only held periodically and are limited to the number of people who can afford to travel. Therefore, US-AEP works with A&WMA and WEF to establish and strengthen their chapters in Korea. The WEF chapter has operated in Korea since 1960, and a new chapter of A&WMA was established last year. Members of the local chapters receive technical publications and updates from headquarters and attend workshops and training programs held in Korea as well as conferences in the U.S. and other Asian countries.

Transfer of Cutting Edge Technology

Commercialization of cutting-edge environmental technologies is the key to achieving sustained growth of the environmental industry and cost effective solutions to environmental problems in Korea. In cooperation with the U.S. Council of State Governments, US-AEP in 1996 provided the Pennsylvania State government with a grant to encourage the development of long-term relationships with Korea in the area of environmental technology. The delegation consisted of

representatives from the Department of Environmental Protection, the Department of Community and Economic Development, and Pennsylvania State University. During the mission, the delegation reached agreement with the Korean Advanced Institute of Technology in Taejon and the Research Institute of Industrial Science and Technology of Pohang Iron and Steel Co. (POSCO) to facilitate areas of cooperation and exchange between Pennsylvania and these organizations concerning environmental technology.

Another initiative is underway to promote "clean" technologies in the agroindustry sector. US-AEP has recruited top food processing companies throughout Asia to join the high-profile Pan Pacific Agroindustry Council, a forum for highlighting best practices in pollution prevention and environmental management in the sector. The founders� meeting was held May 17�19 in Orlando, Florida where the group discussed their objectives for the council and observed the innovative environmental technologies currently being used at Disney World. Executives from the Doosan Group were invited to the meeting as founding members, and agreed to create an Environmental Code of Conduct and Charter for the food industry. With support from US-AEP. Doosan is expected to take a leading role along with other founding members in promoting environmental performance in the agribusiness sector in the Asia Pacific Region.

Environmental Business Opportunities

How will the economic downturn affect the environmental sector and opportunities for U.S. environmental firms in the Korean market? Due to the drastic won devaluation, existing government projects will be affected, and new projects will undergo stringent reviews to assess their importance, necessity, and cost to prevent budget waste. Under the severe competition to win government procurement projects, chaebol and local companies have to restructure towards more efficient industry. Thus, despite the downturn, the new government and chaebol will need to acquire cutting edge technology to increase industrial efficiency, thereby providing new opportunities for U. S. firms. Good market opportunities lie in several related areas, including advanced incineration plasma technology and air pollution control systems, as well as in advanced technology for wastewater management.

The environmental sector is crucial for the reconstruction of the Korean economy. Total market demand size is expected to increase to W6 million (US$4.3Billion) within the next 10 years.1 The participation of large Korean conglomerates, such as Hyundai, Samsung Group, and Daewoo in the environmental sector has rapidly increased during recent years, especially in the form of joint ventures and technology licensing with foreign companies. President Kim Dae Jung and his administration have stated their commitment to the environmental sector. The new administration announced a plan to improve environmental infrastructure by 2005 with a total investment of 57 trillion won ($107 billion) in 22 different environmental sectors. Water supply and wastewater treatment are among the top priorities. According to the Environmental Management Corporation, a quasi-governmental organization, 11 new wastewater treatment plants are currently being designed and constructed.

Municipal solid waste management is another focus of government investment. Korea generates more solid waste per capital than any other country. To control the ever increasing solid waste problem with its limited land area, the Korean government intends to expand the amount of municipal solid waste that is incinerated to 20% by 2001 from 4% in 1995. Investment in municipal solid waste incineration facilities amounted to $213 million in 1996. The Ministry of Environment spent W266.7 billion ($191 million) on solid waste management including construction of incinerators in 1998.

The Korean environmental industry still lacks a systematic approach for completion of large-capacity, advanced projects. Korean capability in architectural design, engineering, and other technical services also is considered insufficient for large projects due to the lack of experience on the part of Korean companies. Herein lies great potential for U.S. environmental exporters.

Increasing Integration of Environmental Systems Between Korea and the U.S.

Thanks to the continuing efforts of the Korean government, chaebol, and local companies, US-AEP/Korea produced excellent results in 1997 and the first half of 1998. Highlights of the achievements include the following:

  • The first seminar of Responsible Care (RC), a voluntary environmental code developed by the Chemical Manufacturers� Association, was held in Seoul on November 14, 1997, with the support of US-AEP�s Clean Technology and Environmental Management Program. The Korean Petrochemical Industry Association sponsored the seminar, and more than 150 participants from the Korean petrochemical and chemical industry learned about the RC experiences of Asian and U.S. chemical industries.
  • In February 1998, Technology Representatives� counseling and advocacy over the previous two years resulted in a contract between a U.S. firm, Gaston County Dyeing Machines Company of Stanley, North Carolina, and the Korean Dyeing Technology Center (DYETEC) for a pilot dye wastewater system worth US$91,680.2
  • Through US-AEP/Korea�s ongoing guidance and support, Bio-Genesis Tech International of Diamond Bar, California, sold a US$1.7 million mobile sequencing batch reactor to a Korean partner (name withheld) in August 1998. The U.S. biotechnology company was one of 11 U.S. companies that participated in a 1996 environmental matchmaker trade mission organized by US-AEP/ Korea.

These efforts are part of a growing trend in Korea and throughout Asia to consider the environmental impacts of economic growth. By working together, U.S. and Korean firms can help create cheaper, more efficient industries and transform the country into a "green" dragon.

1At an exchange rate of 1US$=1,400W

2Although the dollar amount is not large, the purchase is extremely significant, since acceptance of technology will have great influence on the wastewater in Korea and likely lend to future U.S. sales for the multimillion-dollar Nakdong River Cleanup Project.

 

 

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