Wednesday, November 23, 2011

Interview: Mr. Jean-Luc Valerio, President, European Aeronautic Defence and Space Company (EADS) Korea

A French National, Mr. Jean-Luc Valerio is President of European Aeronautic Defence and Space Company (EADS) Korea, and has been in the country since February 2007. EADS is a global leader in aerospace, defense and related services. The Group includes the aircraft manufacturer Airbus, the world largest helicopter supplier Eurocopter and EADS Astrium, the European leader in space programs from Ariane to Galileo. In 2010, the Group’s 10th anniversary year, it generated revenues of € 45.8 billion and employed a workforce of some 122,000. Before relocating to Korea, Mr. Valerio was Senior Vice-President, EADS International-China, and also Head of Singapore Office of EADS International. An aeronautical engineering, he graduated from the French Air Force Academy (Ecole de l’Air) and also has a military pilot licence. “I have been here in Korea for four and a half years now, having arrived in February 2007. Over the past 17 years I have worked mainly in Asia, including Taiwan, Hong Kong, Thailand, Singapore, China and now Korea. Japan is the only country in this region that I haven’t worked in,” he said. Speaking on the business operations of his company, Mr. Valerio noted that EADS has had an average 500 million euro turnover over the last 5 years, and the major part is the sale of Airbus planes to the two national carriers Korean Air and Asiana : the other part being helicopter and Satellites. We are now targeting to introduce our combat jet (the Eurofighter) and some missile systems. In January this year, Asiana Airlines placed an order for six A380s, even as Korean air already started operating the superjumbo jets. Korean Air’s second Airbus A380 started operating long-distance routes from Aug. 9 on the Incheon-New York corridor. The first A380 made its debut on June 6 and is currently employed for the Incheon-Tokyo and Incheon-Hong Kong routes. The airline will take possession of a total of fiveA380s by the end of this year for its Paris and Los Angeles routes. In fact, according to the company’s estimates, Korea would account for around 3.6 percent of the 8,014 aircraft that will be ordered from the Asian region over the next 20 years. Korean orders would amount to around $55 billion out the $1.18 trillion that Asia is expected to spend on aircraft during this period. Another lucrative business section is the defense sector. In fact, it was on his watch that EADS was able to break the stranglehold of US defense companies in the country, with the signing of an MOU, with Korea Aerospace Industries (KAI) on October 18th, 2007, to create a Joint Venture Company for the worldwide sales and marketing of the Korean Utility Helicopter (KUH). The project is aimed at producing hundreds of helicopters to replace the aging UH-1H Hueys currently in service. Not only is KUH being built on Eurocopter's latest technology to be used domestically, but is also aimed for exports into the global market, starting next year. While test flights have already been conducted, mass production will begin in March 2012, and full-scale production in June 2012. In July this year, the company also announced a multi-million euro contract from Korean Aircraft Industries to supply 24 of its AN/AAR-60 MILDS missile warning systems, with deliveries continuing until 2013. Each system uses about 4 passive sensors, which detect the ultraviolet radiation signature of approaching missiles. As for the space sector, the Astrium-built multi-mission Communications, Oceanography and Meteorology Satellite (COMS) was officially handed over to the Korea Aerospace Research Institute (KARI) in August this year. Astrium was contracted by KARI, to design and manufacture the country’s first multifunctional geostationary satellite, COMS, and was launched by Ariane 5 on 26 June 2010. A veritable ‘Swiss Army knife’ of a satellite, COMS is the first three-axis stabilised geostationary observation satellite developed and manufactured by a European company to carry three payloads dedicated to meteorology applications, ocean observation and telecommunications. The handover follows in-orbit acceptance of the satellite, which was successfully completed on March 17th, 2011. He said that his company continues to see strong business prospects in Korea in all the three segments. The advantage of being in Korea is that the relationships are quite regulated and one knows what they have to deal with. This is mostly true for all democracies. For that matter, EADS has been very successful in Asia, with the region accounting for 25 percent of the global sales. Asia Pacific is an important region for the EADS Group. China and India, in particular, show huge market potential, while Korea, Indonesia, Malaysia and Vietnam also offer significant opportunities, he said. Speaking on his role as new president of EUCCK, Mr. Valerio said he was proud and honored to be given this opportunity. In his acceptance speech at the EGM, he had pointed out three reasons for applying to run for presidency: one, to continue and build on the accomplishments achieved by Mr. Hurtiger; second, to advocate the interests of EUCCK members and improve the business environment for EU companies in Korea; and finally to promote European culture and values to Korean authorities and the local business community. He emphasized that his working experience had reinforced the commitment to European values, such as teamwork and creativity. He encouraged EUCCK members to be proud of promoting European history to their Korean counterparts. Even though Europe was currently exposed to harsh economic developments, this crisis would in retrospect prove merely to be a historical anecdote. The new EUCCK President promised to consult and work together with different stakeholder to create a positive business environment for European companies in Korea. “I have always been a pro-European and believe that Europe is stronger by being united. I do believe that differences in diversities are a positive aspect. Many see it as a liability, but I consider it as an asset and in the end the richness of different cultures will prevail,” he said. He noted that his priorities as Chamber Head will be to make sure that the Korean government is respecting their meaningful choice to open the borders to EU products, with the FTA, and there will not be any new regulation to hamper fair activity. “I will make sure that we have all the wonderful resources of business communities to create an environment for small and medium enterprises to get better access and understanding of the Korean market.” In his message to all EUCCK members, Mr. Valerio noted that even as the EU is going through the sovereign debt crisis, everyone has to keep their optimism, and not to reduce their pace or confidence in business. “We cannot be disturbed by something that will be overcome, and must be as active in promoting and innovative to prepare for exit of this crisis,” he said.

Interview: Mr. Kim Byung-soo, Director General, Foreign Investor Support Office, InvestKorea

Invest KOREA (IK), Korea's national investment promotion agency, was established within the Korea Trade-Investment Promotion Agency (KOTRA) with the sole purpose of supporting the entry and successful establishment of foreign business into Korea. With assistance extending to comprehensive post-establishment services, IK enables foreign corporations to maximize the benefits of the Korean investment environment to ensure their rapid settlement in Korea. The agency is committed to providing unmatched, comprehensive one-stop service that allows foreign investors to join many of the world's most successful corporations who have selected Korea as an investment destination and been rewarded by high returns on the investment. The new head of the Foreign Investor Support Office in the investment promotion agency, Invest Korea, is not only experienced and proactive, but is also full of fresh ideas to help investors. As noted by Mr. Kim Byung-soo, Director General, Foreign Investor Support Office, the agency attracts foreign investment by identifying potential foreign investors, supporting investment projects, providing aftercare services for foreign investors, and building a cooperative network with related organizations. Prior to heading the office in January this year, Mr. Kim was with the Ministry of Knowledge Economy as Director, Foreign Investment Policy Division. This Division comes under the authority of the Vice Minister for Trade & Energy in MKE. It is more like a back office of foreign investment related issues. “My main role in MKE was to provide all the logistics support for needed for the implementation of the Foreign Investment Promotion Act. This Act aims to encourage foreign investment through deregulation by providing tax incentives and financial assistance; deals with foreign investment and technology, and introduces a reporting system with regard to foreign investment in Korea. However, now my main job is to implement these very same policies,” he said. In a sense, this gives him the opportunity to deal directly with foreign investors and know their problems. While trying to solve the problems faced by investors, he has to sometimes deal with uncooperative officials in various ministries and local governments. But that has not stopped him from giving his 100 percent to the job, even at the risk of “begging” lower rank officials to help foreign investors. “For me, FDI does not refer to Foreign Direct Investment. Rather, it is Frontier Development Initiative and going even further, Friendship Development Intiative. It is very important to develop friendly relations with investors inorder to understand their problems to solve them,” he said. Since relocating to Invest Korea, he has made it a point to visit the various industrial sites which have a high proportion of foreign investors, to meet with them and understand the difficulties that they may be facing. He has also been going on invesment promotion trips abroad to meet potential investors. “One has to be proactive and meet foreign investors to anticipate what problems they may face. I do not like to wait for them to come to me with their problems, but want to solve them before they become big issues.” Recalling some of the notable cases that he has encountered so far, he said that Scania Korea and Edwards Korea faced some ‘unsolvable’ difficulties. But, after persisting with the various government departments, he was able to make a breakthrough. Speaking on the main objectives of the Foreign Investor Support Office, he said the investment promotion and support capability has been considerably strengthened by the introduction of the Project Manager (PM) system, under which a PM is designated for each investment project to offer customized support throughout its entirety, from providing investment consultation and obtaining licenses and approvals to actually launching a business. “In addition to the project managers, we have a pool of experts in such fields as finance, tax, law, securities, accounting, and construction to smooth the foreign investment process and ensure that investors claim the full range of benefits available,” he said. The office provides support throughout each stage of the investment project, from international promotion of Korea's image and identification of target companies to delivery of customized assistance ranging from research and planning to implementation. The agency also provides substantive feedback from investors to policymakers in order to constantly improve the investment environment. “The range of services we offer has been significantly enhanced following the opening of the Investor Consulting Center (ICC) within Invest Korea Plaza. The center provides information and assistance on a variety of matters relating to foreign investment and daily living in Korea, from selecting plant sites and forging alliances with Korean partners, to education and accommodation.” Additional business-related assistance are provided by officials seconded from the Ministry of Justice, the National Tax Service, the Korea Customs Office, and the courts of law, all of whom offer a broad range of administrative support and respond to complaints made by foreign investors. “I prefer to call this center as Inter Cultural Communication since we provide one-stop consulting services free of charge to foreigners who wish to invest in Korea.The services include pre-investment market research, administrative support, and settlement assistance, for the successful establishment of business in Korea.” The center is staffed by consultants, comprising private-sector experts recruited from key investment-related fields, and civil servants seconded from other major government agencies and ministries, in order to provide systematic and professional consultation services. At the ICC, investors can receive one-on-one consultations on taxation, accounting, and law in the beginning of an investment, and receive administrative assistance directly from government officials for visa application, certification of the completion of investment in kind, and business registration. The center also provides personalized life settlement consultations and a one-day, on-site assistance to help investors settle successfully in Korea. “My main role is to help the foreign investors and I am satisfied only if they do not face any problems while doing business in Korea,” he said.