SUCCESSFUL Investment Missions

KOREA NATIONAL FOOD CLUSTER

No.5 · August / September · 2013

COVER STORY Tackling Food Waste INSPIRING LEADER Mr. Lim Jeung-bin, Director-General of Food Industry Policy Bureau

http:// eng.foodpolis.kr

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FOODPOLIS CONTENTS

02 GREETINGS Greeting Message from Minister

03 News Track Latest News and Statistics

11 Policy Talk 17 37 49 Creative Agriculture

17 Talking Heads Mr. Lim Jeung-bin, Director General at MAFRA

19 Cover Story Tackling Food Waste

31 Regulatory Watch 43 Measures to Build a Creative Economy

37 International Biz FOODPOLIS Forno d'Asolo Publisher 41 Corporate Profile FOODPOLIS (KOREA NATIONAL FOOD CLUSTER) TaeyangB/D 4F 40-9, Jungang-dong, Gwacheon-si, Gyeonggi-do, Korea 427-806 TTC Japan Tel. +82-1688-8782 / http://eng.foodpolis.kr

43 Project Monitor Investment activities in Japan and U.S.A

49 Hansik Design & Printing Agency Popular Korean Chuseok Food A1 LAB Tel. +82 2 336 4089 | www.all-1.com Director: Kim Boil 53 Spotlight Chief Editor: Ram Garikipati Introduction of Jeonju Manager: Yoo Han-seok Sr. Designer: Jang Day-one Photographer: Lee Byoung-sam

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DEAR FRIENDS,

I am pleased to inform you that we recently announced the 'Agriculture and Food Technology Transfer and Commercialization Promotion Plans' to support the attainment of ‘creative agriculture’.

The plans aim to achieve a national and private patent technology transfer rate of 36 percent; a transferred patents commercialization success rate of 34 percent and the creation of 4,000 new jobs by 2017. To achieve this, my ministry will promote technology financing through an agriculture and food ‘fund of funds’ and establish a basis for technology trading and intellectual property rights-use.

You can read all about our innovative plans in this issue of the magazine. My commitment to develop the agricultural sector is very strong, and many other important policy steps will be taken in the future.

The Cover Story focuses on food waste, a very important topic that has been troubling both developed and developing countries. Faced with the challenges of demographic developments, climate change and the need to use resources efficiently, combating food losses and food waste will go a long way in tackling food security.

In developing and low-income countries, the bulk of losses occur in the production and post harvest stage owing to financial resources insufficient to improve existing infrastructure. In industrialized countries like Korea, however, the problem is more behavioral in nature. The global food industry is cooperating with governments to address this issue and we will not spare any efforts to decrease domestic food waste.

This month we celebrated Chuseok, the annual thanksgiving festival. It is a major harvest festival and a three-day holiday in Korea celebrated on the 15th day of the 8th month of the lunar calendar. As a celebration of the good harvest, Koreans visit their ancestral hometowns and share a feast of Korean traditional food.

You get a taste of our delicious traditional food in the Hansik section. The topics that we have covered include the investment missions by FOODPOLIS team to Japan and USA, regulatory update and interviews.

I am sure you will find the information very useful.

LEE Dong Phil Minister of Agriculture, Food & Rural Affairs

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sion of the complex by withdrawing its workers or blocking Economy Grows 1.1% in Q2 traffic. The two Koreas agreed to guarantee the normal operation of the factory complex, protect the security of its workers and investment capital, attract overseas firms to invest in the complex, make efforts to normalize operation by repair- ing its facilities, and form a joint committee to administer the complex. They also agreed to host joint investment presentations overseas to win international recognition of the complex. The latest agreement paved the ground for the two Ko- reas to prevent the future suspension of the factory site and offered a chance to transform the site into an international industrial complex. The South Korean government said it would make efforts to make the KIC a more globally competitive endeavor, which follows common sense and abides by international rules.

Korea’s real gross domestic product (GDP) expanded by 1.1 percent in the second quarter of 2013 compared to the previous quarter, according to advanced estimates released by the Expanded Areas for Bank of Korea (BOK). It was the fastest pace since the first quarter of 2011, when the economy grew 1.3 percent. Com- Investment-based Immigration pared to the same period of the previous year, Korea’s GDP grew by 2.3 percent in the second quarter of 2013. Korea will expand areas eligible for investment-based immi- Agriculture, forestry & fisheries grew 2.0 percent quar- gration into districts within free economic zones in Busan, ter-on-quarter, led by agriculture and fisheries. Manufactur- Incheon and Donghae in a bid to attract quality manpower ing grew by 0.8 percent, as the production of smartphones, and funds from overseas. semiconductors and petrochemicals increased. Construction Among areas designated as free economic zones, Young- expanded by 1.5 percent, led by housing construction, while jong District of Incheon has remained the only area eligible services grew by 0.9 percent, due to rising output in whole- for investment-based immigration. sale & retail, hotels & restaurants, financial & insurance ser- The Ministry of Trade, Industry and Energy and the Min- vices and healthcare & social services. istry of Justice recently agreed to apply the system to more Private consumption and construction investment in- areas around free economic zones where demand for invest- creased by 0.6 percent and 3.3 percent, respectively. Howev- ment exists. Under a plan, the trade ministry will identify in- er, facility investment declined by 0.7 percent, due to a fall vestment demand in the nation’s eight free economic zones in transportation equipment investment. Exports rose by (101 business districts in total) and ask the justice ministry to 1.5 percent, led by audio-visual communications equipment, designate eligible areas. Initial candidate areas include Song- while imports increased by 1.0 percent, led by semiconduc- do District of Incheon Free Economic Zone, Myungji District tors and electronic components. in Busan-Jinhae Free Economic Zone and Mangsang Distrcit in East Coast Free Economic Zone.

Koreas Agree to Normalize Kaesong Industrial Complex

South and North Korea agreed to normalize the Kaesong In- dustrial Complex (KIC) after seven rounds of working-level negotiations on the resumption of joint operations on Au- gust 14. The agreement includes five clauses under which the two sides guarantee normal operation of the joint industrial complex under any circumstances and prevent future suspen-

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Office and said “entrepreneurs committed to creating jobs Gov’t to Streamline Certifications and revitalizing economy are the government’s core partners. Those who make investment deserve special treatment.” for SMBs The plan calls for deregulations on regions which could undergo urban development, stipulating any facility will be The Korean government has started streamlining overlapping allowed to be constructed in the planning and management certifications that distress small and medium-sized businesses zone (11 percent of the land nationwide) except for forbid- (SMBs). The move came after overlapping certifications were den facilities. found to have added to the burden on companies, and in The government plans to modify land-planning law by some cases, hindered companies from landing export deals. selecting facilities that are banned from establishments in The Office for Government Policy Coordination held a such regions by next February. This could trigger a rash of meeting with the Ministry of Science, ICT and Future Plan- construction of restaurants and marts in such regions, having ning, Ministry of Trade, Industry and Energy and Ministry of a positive spillover effect onto provincial land prices. Environment and finalized a plan to eliminate repetition of the national certification system to alleviate the burden on corporations. As a result, overlapping certifications for 583 products, including TV, refrigerator, LED lamp, and hot red pepper paste, will be immediately abolished. The certification standards for 482 products such as TV, refrigerator and LED lamp will be integrated, while certification results for 101 products including red pepper paste and sesame oil. The government forecasts companies will be able to cut certification costs by as much as 43 percent on average from 2.1 million won ($1,892) to 1.2 million won, and shorten the New Measures Against Home average time it takes to obtain certifications by 34 percent on average from 70 days to 46 days. In addition, an integrated Rental Woes model will be put in place to prevent the formation of overlapping certifications in advance. Korea will embark on a new mortgage program for the first- time home buyers from October, which allows them to share profit or loss from home price fluctuations with the government (public housing fund). The new program extends loans of up to 200 million won ($179,099) at an annual 1.5 percent rate to encourage people to switch from “jeonse” or monthly rental to purchasing their own home. The mortgage loan program has two types of loans, profit-sharing loan and profit/loss-sharing loan. Under the profit-sharing type, first-time home buyers are eligible to borrow up to 70 percent of their home value at an annual 1.5 percent rate. Under the profit/ loss-sharing type, first-time home buyers can borrow up to 40 percent of their home value at an annual one to two percent rate and will have a stake Seoul to Clear the Way for equaling their mortgage. In addition, the government will expand tax deductions Investments to salary workers who earn 50 million won or less a year and rent a home under the area size of 85 square meters on a The government announced it would get rid of five bottle- monthly payment basis. necks for business to induce 9.6 trillion won ($8.5 billion) The acquisition tax rates on home purchases will be ad- corporate investment over the next three to five years. The justed to one percent for homes valued at 600 million won or government will also loosen regulations for the use of 12 less, two percent for homes valued at over 600 million won percent of the nation’s land after 19 years of regulations, in to 900 million won or less, and three percent for homes val- order to promote efficient use of lands. President Park Ge- ued at over 900 million won. The same tax rates will be ap- un-hye received a briefing on a plan for the second phase of plied to multiple homeowners, and the current heavy taxa- investment promotion at the meeting held at the Presidential tion on them will be abolished.

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legal preparations for the rest of the year to ensure that the Solar Energy becomes gold exchange opens in the first quarter of 2014. By operating a public market while at the same time Available for Households cracking down on underground transactions, the government will improve the transparency and efficiency of the Solar power energy will be available to households to be gold market. paid on a monthly basis, similar to paying for the use of a water purifier or copy machines, the Ministry of Trade, Indus- try & Energy (MOTIE) said. In a pilot project slated for the fourth quarter, the government will select companies this month to plant solar col- lectors on top of houses and to receive a monthly payment for the solar power energy generated from the solar panels, the ministry said in a statement. After selecting corporate participants for the business model, the government will complete the test program by the end of this year and analyze it to take a step forward next year. Companies which join the project receive rental fees from household customers and renewable energy points (REP) from the government. REP will be tradable on a market to be created by the government later. Intellectual Property Support Fund

The Financial Services Commission unveiled on July 30 measures to boost intellectual property finance. The FSC announced that a fund worth 100 billion won will be set up to support the development of intellectual property, and that the fund may be expanded in the future if demand increases. In addition, there will be financial aid for commercializing intellectual property. Firms that commercialize their intellectual property will be eligible for preferential guarantees, and companies whose intellectual property is deemed valuable enough will be eligible for extra guarantees exceeding their credit limit. The FSC is also planning to introduce an insurance against risks of failing to receive royalty fees, along with a system to help the financial sector assess the value of intellectual property and technologies. Detailed plans regarding Korea to Open Gold Exchange the system will be announced in October. in 2014

The government is planning to open a gold exchange in 2014 and impose stricter control on underground gold transactions, as part of ongoing efforts to encourage legitimate gold trading. A spot market for gold will be created in the KRX, where gold will be traded like listed stocks. Financial institutions and gold-related businesses that fulfill certain financial criteria will be allowed to participate in the market. In order to stimulate trading in the new market, various tax incentives will be provided, such as reducing corporate and income taxes and temporarily eliminating trading commissions. The government will make the necessary systematic and

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Caffe Bene to Open 10,000 Branches by 2020

Caffe bene plans to open 10,000 branches globally by 2020, the company announced as part of the firm’s globalization road map called “Caffe bene Global Coffee Road 2020,” which will focus on expansion into China. In a statement, CEO Kim Sun-kwon said, “We consider China as our starting point to increase our global market share,” Kim added. The nation’s largest coffeehouse in terms of number of stores has signed a business alliance with a Chi- nese investment firm to expand business in China. Caffe bene has a total of 1,000 stores in the world. It operates 99 franchises throughout the world, including 87 lands in Hanam Unionsquare, shopping complex in Han- stores in China, seven in the U.S., three in the Philippines and am city, Gyeonggi Province and Dondaegu transit center in one in Indonesia and Saudi Arabia. Daegu, as well as develop a shopping center Centum City in Busan.

Dongsuh Food Drops Prices on all Coffee Products by 10%

Korea’s largest instant coffee maker, Dongsuh Food, has slashed prices on its major coffee products by five to 10 percent because of the falling prices of international coffee beans, the company said. Dongsuh will cut prices on 20 products, including all types of Maxim Instant Coffee, all kinds of Maxim Coffee Mix and all varieties of Kanu premium coffees. The price of 200-gram packages of Maxwell House Mocha will be cut 10 percent from 5,480 won ($4.91) to 4,930 won, the price of 500-gram units of Maxim Original will be cut 7.5 percent Shinsegae to Invest 2.5 trillion won from 15,260 won to 14,120 won and the price of 1.2 kilogram packages of Maxim Mocha Gold Coffee Mix will be lowered 5 percent from 11,350 won to 10,780 won. Shinsegae Group, a major Korean retailer, said Monday that “In order to contribute to price stabilization and to boost it has decided to invest a record 2.5 trillion won ($2.2 billion) demand during this downturn, we decided to lower prices,” this year to boost domestic demand. Chung Yong-jin, vice said a spokesperson for Dongsuh Food. chairman of Shinsegae Group that operates the Shinsegae Department Store and the country's largest discount chain E-Mart, said the investment is meant to help boost domestic demand and could potentially create new jobs. Shinsegae Group has hired 17,000 new recruits in the first six months of this year and plans to hire 7,000 more in the second half. The announcement comes as Korea seeks to raise its overall employment rate to 70 percent over the next five years. Finance Minister Hyun Oh-seok said in July that Korea would "steadily" place more emphasis on job creation than on growth. According to the the firm, it plans to invest in buying

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Bacchus Celebrates 50 years

It has been 50 years since Korea’s noncarbonated national energy drink Bacchus, which has sold more than 17.7 billion bottles, was released. Dong-A pharmaceutical said it held a ceremony celebrating the golden anniversary at its headquarters in Yongsan-dong, central Seoul, attended by Kang Shin- ho, chairman of Dong-A Socio Holdings, and Kang Jeong- seok, CEO of Dong-A Socio Holdings. When it was released in 1961, Bacchus was sold as tab- lets. It later was sold in an ampoule, or small glass contain- er, until the current Bacchus D bottle was introduced Aug. 8, 1963. Last year alone, 480 million bottles worth 170.9 billion food a loved international food,” said CJ Group President Lee won ($153.5 million) were sold. It is still the best-selling prod- Kwan-hoon during a press conference at the Hyatt Regency uct sold as a single item at Dong-A pharmaceutical. Dong-A Century Plaza in Los Angeles under the slogan, '2013 Global pharmaceutical is currently targeting the global market, ex- CJ 2020 Great CJ.' “CJ has promoted hallyu around the world porting to 28 countries including the United States and Chi- with music, film and other pop culture contents. We are go- na. Cambodia imported 17.2 billion won worth of Bacchus ing to add Korean food to the lineup.” last year alone.

Homeplus to Enhance Partnership

Homeplus, Korea’s No. 2 supermarket chain run by British retail giant Tesco, said that it will improve its partnership with its suppliers and treat them as equal business partners. The plan was announced at the firm’s CEO conference, hosted by Homeplus CEO Do Sung-hwan, with its suppliers and business partners at the Shilla Hotel in Seoul. Over 70 executives from 28 suppliers participated in the meeting. Among the participating companies were LG House- hold & Health Care, Dongsuh Food and Dongbu Farm Gaya. The firm declined to disclose the full list of participants.

During the conference, the firm explained the group’s vision to in order to better understand the changes suppli- CJ to Step Up Globalization ers would face from now on. The company said it will continue to hold the CEO conference, planning to set the meeting of K-Food with non-food manufacturers, as well as fresh food suppliers.

Korean food and media giant CJ Group unveiled its ambitious goal to earn 15 trillion won ($13.4 billion) in sales from its food business unit by 2020 with half of the projected sum expected to be generated from overseas markets. To that end, the company will vigorously pursue the opening of “Bibigo”-branded Korean food restaurants worldwide and boost sales of processed food through the partnership with global retailers such as Wal-Mart, Costco and Tesco. The firm is expected to post 500 billion won in overseas sales of food products this year. “Korea’s cultural wave (hallyu) is shaking the globe wild- ly. We are going to take advantage of this to make Korean

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Korea Partners with APEC, Argentina on Forestry Development

Korea has established a partnership on forest cooperation with countries in South America and APEC member states. The Korea Forestry Service (KFS) signed an MOU on August 12 with Argentina’s counterpart organization in Buenos Aires. The resource-rich Latin American nation agreed to en- gage in substantive cooperation and information sharing. A couple of days later on August 14th and 15th, the KFS team attended the Second APEC Meeting of Ministers Responsible for Forestry held in Cusco, Peru, where Minister Shin Won- sop of the KFS co-hosted a session to talk about effective for- sity curricula and degrees among university students of the estry management for sustainable green growth, one of the participating countries. So far, ten groups of universities from most important items on the agenda. the three countries have participated in the exchange pro- On the sidelines of the APEC meeting, the KFS had gram. Under the joint initiative, the three countries provide high-level talks with partner countries including China, In- support such as aviation fare, living, expenses and accommo- donesia, and Russia about major pending issues such as en- dation for participating students so that they can conduct ac- hancing forestry cooperation. The KFS also met with senior ademic research and learn more about the culture of the host officials of the Food and Agriculture Organization (FAO) to countries without economic difficulties. In its first year of the exchange views on a variety of issues including restoration of implementation, more than 500 students — including 250 in- devastated forests and cooperation for the 2015 Forest Fire vited students — participated in the program. Assembly which will be hosted by Korea.

Korea, Indonesia, Join Forces to Reduce GHG

Korea and Indonesia are setting their sights on a cooperative effort to make the world a more eco-friendly place to live. The Korea Forest Research Institute (KFRI) measured forest carbon accumulation rates in a tropical forest in Indonesia in cooperation with the nation’s Ministry of Forest from July 2nd to 5th, an important step towards enforcing mutual cooperation for reducing greenhouse gases (GHG) and conserving the forest environment. This Korea-Indonesia joint survey, as part of the KFRI’s REDD+ (reducing emissions from deforestation and forest Korea, China, Japan Consider degradation) project, was conducted in the 40,000-hectare West Rinjani protection forest management unit (KPHL Rinja- Extending Joint Exchange Program ni Barat), an area with high potential for cutting down GHG emissions due to its plentiful timber resources. REDD+ is a UN- A joint committee involving educators, experts, and lawmak- led effort to create a financial value for the carbon stored in ers from Korea, China, and Japan was held in Tokyo on Au- forests, offering incentives to developing countries to reduce gust 6th to discuss ways to develop Campus Asia, a trilateral emissions from forested lands and invest in low-carbon paths higher education exchange program. The meeting partici- to sustainable development. The forest research body has fur- pants discussed ways to extend the number of member coun- ther plans to phase in cooperative networks for international tries in order to make Campus Asia a leading university ex- forestry research and REDD+ national strategies and imple- change program in Asia. mentation with other nations including Cambodia, Myanmar, Campus Asia is an international initiative involving Ko- and Laos, as well as Indonesia, which all have high potential rea, Japan, and China which allows joint and shared univer- for GHG mitigation.

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ery this year in Cheongju, North Chungcheong Province. A me- NIZO Wins the 2013 IFT dium-sized beer manufacturer, 7 Brau, which has been selling its products to discount chain stores and department stores Innovation Award since 2011, is also working to increase its market share.

The Dutch contract food research company NIZO food research B.V has won the 2013 Institute of Food Technologists (IFT) Food Expo Award for Innovation. NIZO won the award for its new sensory technology, acoustic tribology. The technology records and analyzes the sound of rubbing of the tongue against the food, and can be used to predict the sensory effects of food innova- tions. Creaminess or astringency of new foods or prototypes such as low fat products can now be determined by meas- uring the sound generated by the food interacting with the tongue during consumption. In this way, the profile of a low fat product can be compared with the full fat version as per- ceived during consumption. The company has noted Mass-Market, High-End Foreign that it is delighted that its ex- pertise and inventiveness are Cars Gaining Ground recognized by the food industry through this distinguished Mass-market and high-end foreign cars are simultaneously award. NIZO’s clients will ben- gaining ground in Korea, industry data showed, as foreign efit from this new technology carmakers introduced moderately priced compact cars. For- in future projects. eign carmakers have been offering compact cars that sell for less than 30 million won ($27,000) in recent years, in an ap- parent bid to lure price-conscious consumers in their 20s and 30s. Foreign cars with an engine capacity of less than 2,000cc accounted for 52.5 percent or 46,944 units of all imported cars sold in the first seven months of this year, compared with 26.4 percent or 10,537 units from the same period in 2008, according to the Korea Automobile Importers and Distribu- tors Association. Local importers of foreign brands also sold 29,790 cars Foreign Beer Brands Gaining with 2,000cc-3,000cc engines between January and July, compared with 14,391 units from the same period in 2008, ac- Market cording to the association. A total of 14,953 units of foreign-brand cars were sold Two local powerhouse – Oriental Brewery (OB) and Hite-Jinro –, in July, up 39 percent from a year earlier, according to data who account for over 90 percent of the market are facing a compiled by the Korea Automobile Importers and Distribu- growing challenge from foreign makers. tors Association. The market share of foreign firms reached 5.7 percent in the first quarter of this year, up from 4 percent in 2010, according to Korea Alcohol & Liquor Industry Association (KALIA). Ja- pan’s Asahi tops the list of international beer brands in terms of sales. Its average annual sales in Korea increased by 47 percent from 2005 to 2012. Another Japanese brewery is taking steps to increase its Korean market share. Kirin Ichiban is run- ning a promotional event in Busan to introduce a frozen craft beer named after the company. Some domestic companies are also taking steps to steal market share from OB and Hite-Jinro. Lotte Chilsung will complete the construction of a beer brew-

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duct all-weather day-and-night observations of the Korean Korea's Urban Population Shrinks Peninsula. The launch of KOMPSAT-5 is an eight-year project initiated by MSIP and the Ministry of Trade, Industry and En- in 2012 ergy (MOTIE), run by KARI and supported by a number of private companies including Hanhwa Corporation. Korea's urban population shrank for the first time in over Orbiting at an altitude of 550 kilometers, KOMPSAT-5 40 years in 2012 despite a growth in the overall size of ur- will provide high-resolution mode Synthetic Aperture Ra- ban areas, a government report showed. The country's urban dar (SAR) images of various data including natural disasters, population came to 91.04 percent of its total population at state of land and resources, and inspection results of the the end of last year, down 0.8 percentage point from a year environment. earlier, according to the Ministry of Land, Infrastructure and Transport. The proportion of urban population dropped for the first time since at least 1970, it said. The report, however, did not specify the number of people living in urban areas, nor if that number had dropped compared to the previous year. Despite a drop in the urban population percentage, the total size of urban areas gained 2.1 percent on-year to 7,039 square kilometers(km2) as of the end of 2012. The country's total area also grew by 40 km2 to 100,188 km2 through land reclamation projects that included an expansion of Seoul's Incheon International Airport, according to the report.

Number of Foreign Workers Soars in Rural Areas

The number of foreign workers in Korea’s farming and fishing sector jumped 3.5-fold in 2012 from three years earlier, data showed. According to the data compiled by the Minis- try of Agriculture, Food & Rural Affairs, the number of im- migrant workers in the country’s farming and fishing sector came to 4,863 last year, compared to 1,390 tallied in 2009. Local households employing foreign workers also jumped more than four-fold to reach 2,677 units over the cited period. Gyeonggi Province surrounding Seoul, held the largest number of employers at 1,034 units, trailed by South Chungcheong Province with 378 units and the southern re- Korea’s Fifth Multipurpose sort island of Jeju with 251 units. Satellite Successfully Launched

KOMPSAT-5, a Korean-built multipurpose satellite, has been successfully launched on August 22nd at around 8:39 p.m. from Yasny Launch Base in Russia. Korea’s fifth multipurpose satellite succeeded in communicating with Troll Satellite Sta- tion in Antarctica 32 minutes later, and then, 87 minutes later, with Svalbard Station at 1:06 a.m. on August 23, according to the Ministry of Science, ICT & Future Planning (MSIP) and Korea Aerospace Research Institute (KARI). Following necessary in-orbit tests and adjustments for the next six months, KOMPSAT-5 will be in operation to con-

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Leading the creative economy through support of agriculture and food technology commercialization, the Ministry of Agriculture, Food & Rural Affairs aims to achieve a technology transfer rate of 36%, a commercialization success rate of 34%, and 4,000 jobs by 2017.

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The Minister of Agriculture, Food and Rural Affairs, Mr. Lee Dong- Goals phil announced the 'Agriculture To create 4,000 jobs by achieving an agriculture and food technology transfer and Food Technology Transfer and rate of 36% and a commercialization success rate of 34% by 2017 Commercialization Promotion Plans' * Technology Transfer Rate for National and Private Patents: to support the attainment of ‘creative (2012) 28% —> (2017) 36% agriculture’. * Commercialization Rate of Transferred Patents: (2012) 27% —> (2017) 34% The plans aims to achieve a national * Job Creation: (2012) 690 jobs —> (by 2017) 4,000 jobs and private patent technology transfer rate of 36 percent (2012, 28 percent), a Support Plans transferred patents commercialization To promote technology financing through a ‘‘fund of funds’, technology trading success rate of 34 percent (2012, 27 and establishment of a basis for intellectual property rights use percent) and the creation of 4,000 new jobs by 2017. 1. Expand ‘‘fund of funds’ investment to companies holding (transferring) To achieve this, MAFRA will promote R&D technologies technology financing through an — Alleviate information asymmetry/ investment risks and guarantee agriculture and food ‘‘fund of funds’ and fund management company profits establish a basis for technology trading 2. Promote technology trading and intellectual property rights-use. — Implement general information network/ integrated intellectual property The key political tasks for extensive DB and foster organizations specializing in technology trading promotion are as follows: 3. Establish a basis for intellectual property rights use — Support intellectual property rights acquisition and introduce an intellectual property rights security loan system and new technology certification system

R&D Outcome Commercialization Stages

Public Research Patent Technology R & D Institutes Company Invest Company Invest Company Right transfer * National R&D

Public Research Secure Commence Patent Technology Manufacture R & D Institutes patent Invest Invest mass Right spread prototypes * National R&D rights production

Private Companies Secure Commence * National R&D Patent Technology Manufacture R & D patent Invest Invest mass * Independent Right spread prototypes rights production company R&D

Private Companies Secure Commence * National R&D Patent Technology Manufacture R & D patent Invest Invest mass * Independent Right trading prototypes rights production company R&D

Technology R & D Initial Market Entry Stage Growth Maturation Transfer / Trading

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Fund of Funds’ Investment Activation and Vegetables Investment Fund and Establishing a Basis for Technology To activate ‘‘fund of funds’ investment for small and medium businesses holding Trading Promotion small and medium scale companies that premium technologies. MAFRA will implement a general possess premium technologies, MAFRA Second, technology assessment information network, strengthen will promote information exchange and commercialization consulting technology marketing, and foster expansion, investment risks alleviation, will be strengthened for investment organizations specializing in technology and incentive granting. companies in August. In addition, Food trading to promote user - supplier In particular, MAFRA will actively and Vegetables Investment Fund risks technology trading. uncover ‘‘fund of funds’ investment of will alleviate in October by providing MAFRA will implement a general success cases for companies holding preferential treatment for R&D related information network for technology patents developed through R&D, government projects application. commercialization to analyze Korean and and will thus accelerate technology Third, when the Food and Vegetables international research trends and the commercialization. Investment Fund invests in businesses economic value of each FACT technology The conclusion of an MOU between planning to make use of agriculture as of June 2014, and strengthen the Korean Institute of Planning and and food R&D project results, MAFRA technology marketing centered on Evaluation for Technology in Food, will establish a plan to transfer the utility model patents for convenient Agriculture, Forestry and Fisheries (IPET), government's portion of the proceeds commercialization. The Agri, Tech, Commercialization & to fund management companies. At the In addition, MAFRA will develop Transfer Foundation (FACT), and the Food same time, a plan to upwardly adjust FACT as an organization specialized and Vegetables Investment Fundon Sep. the percentage of administrative and in agriculture and food technology 26th and the organization of a fair on maintenance costs will be established, trading and promote technology trust the same date, as well as an investment with national patents, currently at 2.5 agreements for national patents in the road show for November represent plans percent going up to 3.0. As such, in agriculture and food fields, as well as for promotion this year. This will expand December, MAFRA plans to implement patents held by universities and the information exchange between the Food profitability improvement measures. private sector in August.

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Establishing a Basis for Intellectual food R&D technology commercialization Property Rights Utilization ( R&D, technology transfer and trading, MAFRA will also promote intellectual initial market entry stage, and growth property rights acquisition, introduction stage). of a new technology certification system, Tasks with companies as supervising and introduction of an intellectual organizations will be expanded in the property rights security loan system. task planning stage in January 2014 While distributing parts of patent and technology value assessment for application fees to small businesses developed patents will be established and agriculture companies, a process as a mandatory requirement in March of already underway, MAFRA will provide 2014. As such, the focus will be placed the necessary information for patent on technology commercialization from acquisition through a consulting service the R&D stage. in August. In addition, by introducing Technology transfer will also be a 'new agriculture, forestry, food, and expanded in June 2014 via the opening of fisheries technology certification a business foundation training course for system December', MAFRA will grant farmers and university students majoring incentives such as low-interest loans and in agriculture, and support for technology additional technology commercialization commercialization follow-up studies. support project application points, to In August, MAFRA offered low- new technology certified companies in interest loans through technology value December. assessment, to promote field-consulting MAFRA will also introduce an services for small and medium companies 'intellectual property rights security loan holding premium technologies. system in March of 2013' to provide loan support without requiring tangible collateral, such as real estate. Strengthening Customized Support i Source: Ministry of Agriculture, Food for R&D Commercialization Growth & Rural Affairs (www.mafra.go.kr). For Stages further details contact MAFRA Science & MAFRA plans to provide customized Technology Policy Division Director Ahn support for each stage of agriculture and Hyeong-geun (+82-44-201-2457)

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Mr. Lim Jeung-bin has been appointed as Director-General of Food Industry Policy Bureau of the Ministry of Agriculture, Food & Rural Affairs on May 13th, 2013.

Prior to being selected as Director- become global food companies. He also General of Food Industry Policy said that the food industry is emerging Bureau, Mr. Lim Jeung-bin served as a promising future, one that generates as spokesperson of the Ministry of added value and creates jobs. Moreover, Agriculture, Food & Rural Affairs (MAFRA). the global food market is estimated to He gained a reputation of being one of be $4 trillion (1.5 times bigger than the the most successful spokespersons in semiconductor industry) and competition the history of the ministry. among nations is intensifying. He called Mr. Lim is now keen to play a pivotal on officials in charge of the complex, role in making an ambitious plan for the which will be completed in Iksan, North Food Industry Policy Bureau, by upgrading Jeolla Province for operation starting its competitiveness, and also addressing in 2015, to become “flexible and impending food industry-related issues international,” describing them as core of Food Service Industry Division, Export recipes for success that had been applied Promotion Team and the Korea National to several flourishing industrial towns. Food cluster Team. Mr. Lim said that the primary target The circumstance surrounding of Food Industry Policy Bureau is that Korea’s food sector is becoming tougher, in order to cope with the new paradigm with free trade agreement launched with of food industry in the 21st century, more advanced agricultural economies it is absolutely necessary to make all such as United States and European colleagues pursue market-oriented mind Union. In addition, with a Korea-China- and become marketing specialists as Japan FTA now being discussed, first-movers in the competing global food concerns have been growing regarding market. sustainability of the local food community On a personal note, he mentioned and small food manufacturers. that based on “Sound body, sound Following his appointment, Mr. Lim mind”, he enjoys playing badminton would like to put more emphasis on with colleagues in the early mornings. preparing against external threats as well Because of his charismatic personality as addressing internal challenges in order and open-minded character, his to ensure opportunities for strengthening colleagues consider him to be a trustful competitiveness of the food industry and person that everybody lauds to the skies. its technology. Mr. Lim was born in Boeun county, He highlights that Korea National Chungcheongbuk-do and spent most of Food Cluster (Foodpolis) will be the his early childhood there. He graduated best model of creative economy which from Chungnam National University. president Park Geun-hye would like After his masters degree, he started to aim at supporting innovative small to work for the government in 1991. companies and is provide them full- He has lovely wife, one son and one fledged assistance to enable them to daughter.

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Faced with the challenges of demographic developments, climate change and the need to use resources efficiently, combating food losses and food waste will go a long way in tackling food security.

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Global agricultural production is expected to grow 1.5% a year on average over the coming decade, compared with annual growth of 2.1% between 2003 and 2012, according to a new report published by the OECD and FAO. Limited expansion of agricultural land, rising production costs, growing resource constraints and increasing environmental pressures are the main factors behind the trend. But the report argues that farm commodity supply should keep pace with global demand. The OECD-FAO Agricultural Outlook 2013-2022 expects prices to remain above historical averages over the medium term for both crop and livestock products due to a combination of slower production growth and stronger demand, including for biofuels. The report says agriculture has been turned into an increasingly market-driven

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sector, as opposed to policy-driven as it markets, and is the special focus of the next 10 years. They will account for was in the past, thus offering developing report. China is projected to remain the majority of world exports of coarse countries important investment self-sufficient in the main food crops, grains, rice, oilseeds, vegetable oil, opportunities and economic benefits, although output is anticipated to slow in sugar, beef, poultry and fish by 2022. given their growing food demand, the next decade due to land, water and To capture a share of these economic potential for production expansion and rural labor constraints. benefits, governments will need to invest comparative advantages in many global Driven by growing populations, higher in their agricultural sectors to encourage markets. incomes, urbanization and changing diets, innovation, increase productivity and However, production shortfalls, price consumption of the main agricultural improve integration in global value chains, volatility and trade disruption remain a commodities will increase most rapidly FAO and OECD stressed. threat to global food security. The OECD/ in Eastern Europe and Central Asia, Agricultural policies need to address FAO Outlook warns: “As long as food followed by Latin America and other the inherent volatility of commodity stocks in major producing and consuming Asian economies. markets with improved tools for risk countries remain low, the risk of price The share of global production from management while ensuring the volatility is amplified. A wide-spread developing countries will continue to sustainable use of land and water drought such as the one experienced in increase as investment in their agricultural resources and reducing food loss and 2012, on top of low food stocks, could sectors narrows the productivity gap waste. raise world prices by 15-40 percent.” with advanced economies. Developing China, with one-fifth of the world’s countries, for example, are expected to Food Waste Estimates population, high income growth and account for 80 percent of the growth a rapidly expanding agri-food sector, in global meat production and capture Food losses and food waste occur will have a major influence on world much of the trade growth over the in every part of the world. However,

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including water, land, energy, labor and capital and needlessly produce greenhouse gas emissions, contributing to global warming and climate change. In developing countries food waste and losses occur mainly at early stages of the food value chain and can be traced back to financial, managerial and technical constraints in harvesting techniques as well as storage –and cooling facilities. Thus, a strengthening of the supply chain through the support farmers and investments in infrastructure, transportation, as well as in an expansion of the food –and packaging industry could help to reduce the amount of food loss and waste. In medium- and high-income countries food is wasted and lost mainly at later stages in the supply chain. Differing from the situation in developing countries, the behavior of consumers plays a huge part in industrialized countries. Moreover, the study identified a lacking coordination between actors in the supply chain as a contributing factor. according to the FAO, in developing Nations Environment Programme (UNEP), Farmer-buyer agreements can be helpful countries over 40 percent of these the impact of food waste is not just to increase the level of coordination. losses take place in the post-harvest financial. Environmentally, food waste Additionally, raising awareness among and processing stages, whereas in leads to wasteful use of chemicals such industries, retailers and consumers as industrialized countries they occur chiefly as fertilizers and pesticides; more fuel well as finding beneficial use for save in the distribution and consumption used for transportation; and more rotting food that is presently thrown away are stages. food, creating more methane – one of useful measures to decrease the amount In developing and low-income the most harmful greenhouse gases that of losses and waste. countries, the bulk of losses occur in the contributes to climate change. Methane In the United States 30 percent of all

production and post harvest stage owing is 23 times more potent than CO2 as food, worth $48.3 billion, is thrown away to financial resources insufficient to a greenhouse gas. The vast amount of each year. It is estimated that about half improve existing infrastructure. food going to landfills makes a significant of the water used to produce this food In industrialized countries, however, contribution to global warming. also goes to waste, since agriculture is the problem is more behavioral in Roughly one third of the food the largest human use of water. nature. In recent decades in the EU, produced in the world for human United Kingdom households waste rising agricultural productivity has made consumption every year — approximately an estimated 6.7 million tons of food it possible to guarantee a reasonably 1.3 billion tons — gets lost or wasted. every year, around one third of the 21.7 priced food supply for the public. This Every year, consumers in rich million tons purchased. This means that development, coupled with a rise in countries waste almost as much food approximately 32 percent of all food disposable income, has had the effect (222 million tons) as the entire net food purchased per year is not eaten. Most of slashing the proportion of people's production of sub-Saharan Africa (230 of this (5.9 million tons or 88 percent) is budget that is spent on food. This million tons). currently collected by local authorities. trend can partly explain the increase in The amount of food lost or wasted Most of the food waste (4.1 million tons consumer waste. Sociological reasons every year is equivalent to more than half or 61%) is avoidable and could have been such as changes in family structure or of the world's annual cereals crop (2.3 eaten had it been better managed. lifestyle are also contributing factors in billion tons in 2009/2010). In the USA, organic waste is the food waste. Food loss and waste also amount second highest component of landfills, According to estimates by United to a major squandering of resources, which are the largest source of methane

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emissions. were put into its production are lost. consumer food waste. Up to 50 percent of food gets Not only are these increasingly scarce "The Save Food Asia-Pacific wasted in EU households, supermarkets, resources, such as water and fuel, lost, Campaign seeks to raise awareness restaurants and along the food supply but greenhouse gas emissions are also about the high levels of food losses - chain each year, while 79 million EU associated with the disposal of food. particularly post-harvest losses - and the citizens live beneath the poverty line Therefore, food wastage represents growing problem of food waste in the and 16 million depend on food aid from a missed opportunity to feed the growing region," Konuma said. charitable institutions. world population, a major waste of "FAO estimates that if the food Currently food wastage amounts in resources and a needless source of wasted or lost globally could be reduced the EU to 89 million tons per annum (i.e. greenhouse gas emissions that impacts by just one quarter, this would be 179 kg per capita) and the projection climate change. It also has negative sufficient to feed the 870 million people for 2020 – if no action is taken – is 126 economic consequences for everyone suffering from chronic hunger in the million tons (i.e. a 40 percent increase). along the food chain when food goes to world," said Konuma. waste. The announcement came as Konuma Asia-Pacific Campaign Denouncing the huge amount of opened the two-day High-Level Multi- food that goes to waste, FAO Assistant Stakeholder Consultation on Food While hunger is the world’s number one Director-General and Regional Losses and Food Waste in Asia and the health risk, about one third of food for Representative for Asia and the Pacific, Pacific Region in collaboration with the human consumption is lost or wasted Hiroyuki Konuma, recently announced Asian Institute of Technology and other globally each year. In addition, when a new initiative aimed at stopping post- partners. food is wasted, all of the resources that harvest food losses and market-to- More than 130 participants from 20

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countries attended the Consultation, the benefits of economic growth were Agriculture (USDA), in collaboration with including four Agriculture Ministers. The unevenly distributed, resulting in a the U.S. Environmental Protection Agency Consultation will study ways to reduce widening income gap in many countries (EPA) launched the U.S. Food Waste food loss and waste and is expected to in the region. Challenge, calling on others across the issue a communiqué outlining actions According to statistics from the food chain—including producer groups, that can save food from farm to table. United Nations Economic and Social processors, manufacturers, retailers, According to Konuma, "The world Commission for Asia and the Pacific, an communities, and other government produces more or less sufficient food estimated 653 million people across the agencies − to join the effort to reduce, to meet the demand of its current region, lived below the national poverty recover, and recycle food waste. population of 7 billion. However, 12.5 line in 2010. Secretary Tom Vilsack and EPA percent of the global population, or 868 There is no doubt that win the Acting Administrator Bob Perciasepe were million people, equivalent to one in eight context of Asia and the Pacific Region, joined at the event by representatives people, go hungry every day. In 2012, more effort is needed to raise global from private-sector partners and the Asia-Pacific region was home to 536 awareness of the critical issue of food supporters including Rio Farms, Unilever, million hungry people, or 62 percent of losses and particularly post-harvest General Mills, the Food Waste Reduction the world's undernourished." losses as well as food waste, which is a is Alliance, Feeding America, and Rock and The Asia-Pacific region benefitted increasing nowadays. Wrap It Up!. from rapid economic growth in the Food waste in the United States is first decade of the 21st century. But, American Initiative estimated at roughly between 30 to 40 successful economic growth did not percent of the food supply. In 2010, an alleviate hunger and poverty, because In June, the U.S. Department of estimated 133 billion pounds of food

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from U.S. retail food stores, restaurants, and homes never made it into people's stomachs. The amount of uneaten food in homes and restaurants was valued at almost $390 per U.S. consumer in 2008, more than an average month's worth of food expenditures. "The United States enjoys the most productive and abundant food supply on earth, but too much of this food goes to waste," said Secretary Vilsack. "Not only could this food be going to folks who need it – we also have an opportunity to reduce the amount of food that ends up in America's landfills. By joining together with EPA and businesses from around the country, we have an opportunity to better educate folks about the problem of food waste and begin to address this problem across the nation." "Food waste the single largest type of waste entering our landfills -- Americans throw away up to 40 percent of their food. Addressing this issue not only helps with combating hunger and saving money, but also with combating climate change: food in landfills decomposes to standards, streamline procedures for create potent greenhouse gases," said Launched at an event in Brussels in donating wholesome misbranded meat EPA Acting Administrator Bob Perciasepe. the presence of distinguished speakers and poultry products, update U.S. food "I'm proud that EPA is joining with USDA from the European Parliament, the loss estimates at the retail level, and today to announce the U.S. Food Waste European Commission, a number of pilot-test a meat-composting program to Challenge. With the help of partners NGOs and industry representatives, co- reduce the amount of meat being sent to across the country, we can ensure that signatories of the Declaration aim not landfills from food safety inspection labs. our nation's food goes to our families and only to work towards preventing edible those in need – not the landfill." food waste but also to promote a life- Through its Food Recovery The goal of the U.S. Food Waste cycle approach to reducing wastage Challenge, EPA will provide U.S. Food Challenge is to lead a fundamental shift and to proactively input into European, Waste Challenge participants with the in how we think about and manage food national and global solutions and opportunity to access data management and food waste in this country. The initiatives in this area. software and technical assistance (www. Challenge includes a goal to have 400 With the long-term sustainability of epa.gov/smm/foodrecovery) to help them partner organizations by 2015 and 1,000 the food chain foremost in mind, and quantify and improve their sustainable by 2020. conscious of the global environmental food management practices. As part of its contribution to the U.S. impact of food disposal such as an Food Waste Challenge, USDA is initiating increase in greenhouse gas emissions, a wide range of activities including European Initiative co-signatories commit to contribute activities to reduce waste in the school to the objective of reducing food In July, representatives from across meals program, educate consumers wastage throughout the entire food Europe’s food supply chain announced about food waste and food storage, and supply chain, in line with the European the launch of a joint effort to tackle the develop new technologies to reduce food Commission’s goal of halving edible food major societal problem of food wastage via waste. USDA will also work with industry waste by 2020, set out in the Europe the publication of their Joint Declaration to increase donations from imported 2020 Flagship Initiative ‘A resource- entitled, ‘Every Crumb Counts’. produce that does not meet quality efficient Europe’. Furthermore, the Joint

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Declaration explores how new markets Food Wastage Declaration, ‘Every Crumb on best use and storage of packaged and better food recovery can contribute Counts’ has received so far; it is our hope food products. Further investments in to economic growth. that this will be rolled out effectively not packaging innovation and technologies, Lending his support to the initiative, only among actors along the food supply such as in the areas of active and Matthias Groote MEP, Chair of the chain, but also by other groups, thereby intelligent packaging, increasing shelf-life European Parliament’s Environment, contributing significantly to the flagship and portion sizes, play a key role.” Public Health and Food Safety EU 2020 Goal for a resource-efficient Isabel Jonet, President of the Committee, said: "Food wastage does Europe. FoodDrinkEurope is pleased European Federation of Foodbanks not only have a big impact on the global also to announce the launch of its new (FEBA) commented: “Recovering food situation, but also significant Food Waste Industry Toolkit , ‘Maximizing edible food before it is destroyed and economic and ecologic consequences. food resources: A Toolkit for food redistributing it to beneficiary charities I welcome the launch of the Joint manufacturers on avoiding food wastage’, which take care of deprived people is Stakeholder Declaration which seeks to developed to help food manufacturers the ‘raison d’être’ of our network of 253 raise awareness of food waste and of reduce and prevent food waste by sharing food banks in 21 European countries. solutions to tackle this issue, and of the best practice and guidance throughout FEBA thoroughly supports this Joint presentation of the new online toolkit for the industry”. Declaration on Food Wastage as we manufacturers. Policymakers, companies Virginia Janssens, Managing Director are convinced that building stronger and consumers all have to be part of the of EUROPEN added: “As part of the food cooperation between food banks and solution". supply chain, EUROPEN (packaging FoodDrinkEurope members is a very Speaking on the occasion of the supply chain) members are committed efficient and proven way to reduce food launch, representatives of the several co- to further contribute to food waste waste and hunger simultaneously”. signatory organizations emphasized the prevention. Packaging is part of the Mark Linehan, Managing Director of importance of the initiative: solution as it prevents food spoilage the Sustainable Restaurant Association FoodDrinkEurope President, Jesús for longer and ensures food quality (SRA) said: “The SRA welcomes and Serafín Pérez said: “We are encouraged and safety along the supply chain and supports this Declaration as it addresses by the degree of support that the Joint at home, also informing consumers one of the most important global

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issues of our time. Food wastage has societal and political debate regarding an enormous social, environmental and food wastage. Whilst potatoes which economic impact, so reducing it should cannot be sold fresh are generally be a no-brainer for restaurants, especially used for processing or animal feed, our as we know from research that it is involvement in the Joint Declaration aims something diners care about deeply. to raise further awareness about the Many restaurants are already taking issue and to exchange best practices significant steps, and we would urge in the supply chain but and towards the those that are not, to take action now, for consumer." the benefit of the planet, food security Philippe Binard, General Delegate of one third of the edible portions of food and their bottom line.” Freshfel Europe noted: “Food wastage is produced for human consumption are Rocco Renaldi, Secretary General a highly complex issue which requires the never eaten and that is unacceptable. of FoodServiceEurope commented: involvement of all partners in the supply Plastic packaging can play a significant “Reducing food waste is a real challenge, chain in order to tackle it effectively and role in reducing this number and that is especially in the just-in-time environment not just shift it further up or down in why EuPC is welcoming and supporting of the contract catering sector. But the chain. This has been the key driver the ‘Every Crumb Counts’ Declaration”. it is an environmental, economic and for Freshfel’s participation in the Joint Today, companies are beginning to ethical imperative that we play our part. Declaration. There’s no silver bullet understand the social, environmental, FoodServiceEurope is proud to join food solution, but we hope the increased and economic costs of food waste and manufacturers and others in what we awareness and exchange of best starting to recognize the benefits of hope will become a food chain approach practices within the fruit and vegetable reducing waste or diverting it to better to food waste reduction.” category will help to reduce the level of uses. These opportunities can be pursued Frédéric Rosseneu, Secretary wastage across the chain.” through innovation, collaboration, and General of Europatat said: “We Ingrid Verschueren, Packaging leadership. recognize the importance of the current Division Manager of EuPC said: “Roughly

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The Korean Government recently announced middle to long-term tax policy plans that will reform the current system in place.

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As noted by the policy note, published Work Life Compatible’ initiative, in order to in the Monthly Economic Bulletin of boost the female labor participation rate. the Ministry of Strategy & Finance, it is necessary for tax policy to reflect Fiscal conditions related to demographic changes in middle to long-term socio- changes economic structures, including growth potential, demographics, climate change, The Korean population is aging quickly socioeconomic gaps, and unification and therefore welfare-related costs, such preparations. as pensions, are increasing while there is a possibility that the fiscal balance will Potential growth rate worsen. The Korean people’s demands for welfare services, such as universal Potential growth is trending down due childcare and free school lunches, are to limits on possible increases in labor increasing as well. input owing to both the low birthrate and the aging population, and decreased Environmental change investment due to a fall in the savings rate. The growth in tax revenues is forecast to Uncertainties regarding energy supply gradually decline compared to Korea’s and demand, such as persisting high period of high growth, owing to both gas prices and increasing electricity a slowdown in the growth rate and an demand are growing. It is also necessary already significantly broad tax base. It for Koreans to begin adapting to climate is necessary to develop an institutional change, such as by making efforts to strategy, such as the ‘Making Family and reduce greenhouse gases.

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Tax policy management plans percent of GDP as of 2010, the fifth highest in the OECD. Corporate tax Income and financial tax system rates are progressive and composed of three brackets in order to support Current state of affairs: small- and medium-sized enterprises Income tax revenue was only 3.6 (SMEs). percent of GDP as of 2010, and was Plans: ranked 30th out of the 32 OECD A growth-friendly tax system will be countries. Only about 37 percent of maintained in order to support the earned income is taxed due to various Korean economy’s transformation tax exemptions and deductions. into a creative economy. Non-taxable Plans: items, tax exemptions, reductions The income tax will be reformed by and deductions will all be adjusted, modifying tax deductions and taxing and the efficient management of income that had been tax-exempt. The public finances will be promoted tax base will be expanded and various by strengthening the connection tax deductions will be modified in between tax expenditures and budget order to improve the income tax as a expenditures. percentage of GDP and boost fairness. Income gap: The income gap, which had widened Corporate taxes during the 2008 financial crisis, recovered to pre-crisis levels in 2012 in Current state of affairs line with both the economic recovery Korea’s corporate tax revenue was 3.5 and employment growth.

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Preparations for unification: Taking into account the current state of division between South Korea and North Korea, it is necessary to secure adequate fiscal space to ensure that South Korea is economically prepared for unification.

Property taxes

Current state of affairs: Korea’s property tax revenue was 2.9 percent of GDP as of 2010, the seventh highest in the OECD. The OECD average was 1.8 percent. The gift and inheritance tax’s highest bracket is 50 percent, which is tied with Japan for the highest rate in the OECD. Plans: The government will promote lowering taxes on real estate transactions and optimizing possession taxes, and will improve the gift and inheritance tax in order to rectify imbalances and boost economic efficiency.

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Consumption taxes and deductions associated with the should be established according to VAT and the individual consumption both Korea’s economic conditions Current state of affairs: tax. Negative externalities will be (a small-sized open economy) and Korea’s regular consumption tax corrected by revising energy taxes, changes in the international tax revenues were 4.4 percent of GDP as and the individual consumption tax will environment. Advances should be of 2010, which was somewhat lower be adjusted to target high-end luxury made with regards to international tax than the OECD average of 6.9 percent. items. systems, such as the introduction of an However, the individual consumption OECD standard, in order to prevent tax tax, at 3.8 percent of GDP, was in line International cooperation on taxes evasion and aggressive tax avoidance. with the OECD average of 3.5 percent. Korea will promote strengthening Korea’s value-added tax (VAT) rate, at Current state of affairs: international cooperation by signing 10 percent, was lower than the OECD The globalization of the economy has tax treaties and information exchange average of 18.7 percent, and there led to demands for a full review of the agreements. are many tax exemptions. In the case current tax system. Specifically, it is of energy taxes, existing taxes mainly necessary to increase international Tariffs and FTA implementation target fuel, which is an impediment to cooperation and improve tax systems tax neutrality. in order to prevent tax evasion. Current state of affairs: Plans: As of June 2013, 10 FTAs have been The tax base will be expanded by Plans: signed and Korea is pushing for new modifying tax exemptions, reductions A suitable international tax model negotiations in order to make the

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Korean market even more open, but of annual expenditures of the central well as the gift and inheritance tax. the FTA utilization rate remains low. government to local governments Plans: is about 4:6. Special purpose taxes, Plans Korea will respond to the changing such as the Education Tax, the Special The government will modify national international trade environment, which Tax for Rural Development and the and local taxes while taking into includes an increase in FTAs, and Transportation, Energy and Environment consideration the central government therefore will revise customs duties, Tax, have been added to various tax and local governments’ fiscal space, modify customs refunds, and promote items, making the current tax system the gaps in fiscal capabilities between measures to boost the FTA utilization complicated. local governments and tax collection rate. Systems will be improved owing The government is in the process of efficiency. The tax code will be to the increase in new forms of rewriting the current tax laws to be simplified by modifying special purpose commerce, including e-commerce and clear, concise and easy for taxpayers taxes and rewriting current tax laws. express cargo. to understand. The revisions are separated into two stages. Stage 1 Other areas started in 2011, and the government is in the process of rewriting income tax Current state of affairs: laws, corporate tax laws, and VAT laws. National taxes dwarf local taxes by Stage 2 will begin in 2014, when the about 8:2. However, taking into account government will work on rewriting the i Source: Ministry of Strategy & Finance intergovernmental transfers, the ratio Framework Act on National Taxes, as (www.mosf.go.kr)

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Forno D'Asolo S.p.A. is a privately held company that operates in the bakery products industry. Forno D'Asolo S.p.A. headquarters are located in Maser, Italy.

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Forno d’Asolo’s history in the production A variety of factors contribute to market understanding what the market of frozen food specialties began in 1985 making each Forno d’Asolo product really need,” he said. in Maser (Treviso) with the passion and unique: proper selection of the ingredients, He was very impressed after lookin enterprise of two brothers, Fabio and Paolo artisanal care in working the dough, Foodpolis project in Seuol and he’s idea is Gallina. precision in the rising times, rapid freezing also to involve some company that could Coming from a long time of bakers of the products, prompt delivery, and be interested to set up a production line and with their extensive knowledge in attentive customer assistance designed in Corea. the field of bread-making and pastry to help our customers understand the The company has more than 100 making, the two entrepreneurs took up a best way to prepare the various specialty employees; when combined with agents revolutionary challenge: to mass produce products that we sell. and other collaborators, who work with ready-to-bake frozen specialties with the The company specializes in sweet it either independently or in various quality and flavor of homemade products bakery goods, savory bakery goods, Italian capacities, this figure increases to more that have just been prepared and filled. cakes and Italian breads. than 350 people. In addition, it has more This ambitious goal required As noted by Dr. Marco Rossini, than 700 products in the catalogue, 15,000 the development of new production Business Advisor for Forno d’Asolo for the m² of production facilities, 5 complete and technologies. In only a few months, the strategic and organizational development fully automated production lines, 41,000 market began to recognize and appreciate for foreign markets, the company is m³ of fully robotized cold storage facilities the genuineness of the Forno d’Asolo working on two main area this year, to (-22°C) at the headquarters and another products and Fabio and Paolo Gallina increase its position in local market and 20,000 m³ at 12 different sites throughout launched the first frozen filled Cornaretto expand business abroad. Italy, and a laboratory for testing antique in Italy. It was initially filled one by one and “This means to find new partnership recipes and developing new ones. soon was flanked by other specialities like that permit us to increase our market “These are the numbers that have Sacchettini and Strudelini. This affirmed share in each country. For each eastern made Forno d’Asolo a leading company the company as an Italian leader. country we prepare a strategy for single that is relied on by more than 20,000

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operators in the catering sector around at the reduction of energy consumption prevents the emission of more than the world. Our competitive advantage and resources exploitation. We therefore 135,000 kg of CO2 and saves more than are the production lines, each day we continually strive to reduce as much as 4,300 tons of wood.” produce more than 1,000,000 pieces possible the impact that our production And also the printing of our catalogues, and now we develop new production processes have on the surrounding leaflets and brochures are made on line for mini cornetti that permits us to environment and ecosystem.” ecological paper fulfilling the eco- produce 18,000 pieces per day. Our other He added: “At Forno d’Asolo, we have sustainable parameters requested by FSC. competitive advantage in local market is implemented numerous environmental He explained that Forno d’Asolo the distribution and the high quality of our sustainability measures, including: waste strives to be more than mere numbers products,” he said. sorting, that is collected in order to be and sales. The human touch is still the Dr. Rossini noted that protecting the recycled and to avoid pollution for the foundation of its relations, both internal environment and the ecosystem plays a environment, using recyclable packaging, among colleagues, and external with considerable role in achieving the goal of and installing a photovoltaic system on our suppliers, customers and society as excellence that the company first set for the roof of our production and storage a whole. For this reason, the company itself when it was founded. facilities, which saves more than 250,000 supports various social initiatives. “We support green policies that aim kWh each year and, more importantly, The ‘I BAMBINI DELLE FATE’

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Foundation is a not-for-profit foundation it contributes to its scientific research in a understand policy issues and also is on the helps autistic children by promoting social continuous effort to cultivate hope. look out for a distributor. integration, providing support to families He also noted that no activity The growth potential for bakery and assisting with medical expenses. represents the core values of Forno d’Asolo products industry and their impact on In addition, it contributes to scientific – commitment, dedication and passion – lifestyles is very high, he said. research on various childhood disorders, better than sports. The Korean government initiative to particularly autism. “This affinity has led us to support and develop the food industry in Northeast The general purpose and objective promote sporting events and programs Asia and promote FOODPOLIS, he said, is of ‘PORTAVENTURA’ Foundation is to on all levels, from amateur events to an excellent idea. contribute to society’s wellbeing and to competitions that attract champion “FOODPOLIS is a big project for the improve the quality of life for people at risk athletes, like the women on the Forno future, my opinion is that it could be the of social exclusion, especially children and d’Asolo-Colavita Professional Women’s future THE Bridge (not "A" bridge, but young people. Cycling Team.” "THE") between Korea and China. This ‘La Città della Speranza’ is a Speaking on the plans for operation means a big potential to attack companies foundation that funds the pediatric center in Korea, he said at the moment, the that need and believe to develop business of oncological-hematology of Padua and company is studying the market to in Eastern Asia.”

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Safety and quality are today’s most important objectives in food development. Supported by the professional staff of research technology, TTC offers research technology to ensure early realization of the objectives.

Established in 2001, Total Technological Writer and Statistical analysis. formula. Support for preparing Consultant (TTC) is a Contract Research monograph with the test data. Organization specializing in Foods for The company’s support for FOSHU Specified Health Use (FOSHU) and Health application includes: TTC also provides consultation about Foods development. — Development of FOSHU (Foods for quality control system such as ISO. As noted by Mr. Tetsuro Yamamoto, Specified Health Uses) and support Representative Director, TTC, the for application procedure Fundamental & Safety test: company offers a range of services to — Consultation for safety test and effect TTC supplies fundamental data regarding operate clinical trial precisely, rapidly and check test with animal and human safety and functionality that are necessary objectively. — Negotiation with the Ministry of for marketing products and ingredients. “We provide a full range of professional Health, Labor and Welfare and They undertake cost effective tests due services in Japan. We are supporting entire collection of information/data. to their alliance with various colleges FOSHU and Health Foods developing with and testing institutes. The main tests SMO (Site Management Organization) The activities of support in developing include checking functionality such as and nationwide medical institutions. TTC food and functional food are: antioxidation activation of foods and prepares scientific data concerning safety — Research on patent and technical cosmetics using rat/mouse or test tube and functionality and supplies technology literature regarding functionality and check safety such as acute toxicity/ that are essential for investigation.” and composition of the scheduled chronic toxicity. The company cooperates with about new product. 50 nationwide medical institutions in — Consultation regarding safety and Clinical Test: Japan, and many medical specialists have functionality tests for ingredients and TTC supplies test for life-style related assumed advisory roles in TTC. The staff the finished product. diseases with big number of 230,000 system is organized by MD., PhD., VMD., — Support in patent application of study monitors. This is an affiliated business registered dietitian, specialists of Medical results and specific composition with e-Kencom Co., Ltd. (Established by

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NTT-ME and Seikokai Health Management Center) By the co-operation of 230,000 monitors, the company can at once select Mr. Tetsuro Yamamoto Graduated from Osaka University, the best monitors of life-style related Department of Technology disease reserves such as high blood sugar Doctor of Engineering level, high cholesterol level, high body — Part-time Assistant Professor at fat level etc. The tests are conducted Graduate School of Medicine, by clinical doctors at 100~1000 beds University of Tokyo hospitals. — Part-time Assistant Professor at The test by monitors of hepatitis, Advanced Medical Institute, gastritis, anemia patients and healthy Hyogo Medical College monitors is done under the guidance of — Part-time Assistant Professor at doctors. They also check the safety aspect Teikyo University of excessive intake of food and functionality — February 1999: Awarded the first of food. Tamio Hiratani Commemorative Prize Management of Patent application: — Fellow of New York Academy of TTC also undertakes practical application of Science. patent regarding immunity and anticancer agents, technical service for obtaining/ protecting patent and management of academic study. i The company is ready give advice to clients regarding study and technology. For further details visit the website http://www.ttc-tokyo.co.jp

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The FOODPOLIS undertook very successful investment missions to Japan and USA, seeking to attract more potential partners in the national food cluster.

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It is often said that South Korea and Japan are so close, yet so far, in that people of both countries don't understand each other. However, stereotypes aside, the investment mission of Korea National Food Cluster (FOODPOLIS) seemed to be an exception. Mr. Park Jong-guk, Chairman, Agency of Korea National Food Cluster, led an investment team to Tokyo from July 23rd to 26th to have one-on-one business meetings with potential Japanese food investors. Chairman Park had individual talks with 5 Japanese food manufacturers and their R&D directors such as Takano Foods, Kirin, Bizen Chemical, POLA R&M and Marukome. Japanese food manufacturers were impressed with the presentations and showed strong interest in the geopolitical advantages of FOODPOLIS. In particular, the status of Korea’s FTA, outstanding human resources, 3 major R&D supporting systems (Food Quality & safety center, Food Functionality Evaluation Center, Food Packaging Center) and foreigners’ investment incentives and subsidies. Takano Foods took part in Korea Food Show hosted by Ministry of Agriculture, Food and Rural Affairs at Kintex, Korea from May 14th to 17th this year, for the first time to promote Natto product, one of Japanese traditional food. The company is researching current Korean’s flavors on Japanese food and is exploring ways to set up a marketing channel in the Korean market. As a result, Natto’s popularity with local citizens is expected to grow rapidly. Takano foods is

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strongly interested in setting up an export in Japan. The company was founded in channel to Northeast Asian market and is 1929 and delivers a broad range of new keen to sell more competitive products in knowledge through its research and the Korean market. development arm. POLA R&M takes an Bizen Chemical expressed strong integrated approach to manufacturing intention to establish an investment that covers everything from planning to Memorandum of Understanding with research and from materials development FOODPOLIS because the company used to the production process and its most to import Korean Ginseng and oyster to attractive strength is its “value chain” that produce medical products in Japan. The produces leading products to meet Korea primary activities of Bizen chemical are customer’s demands. producing pharmaceutical products and In their meeting, Kirin officials healthy food. In particular, the company pointed out the fact that sales of would like to make a courtesy visit to imported premium beer are on the Iksan city to take a look at the real rise with a growing number of young site development plan and supporting consumers preferring foreign beers to facilities in FOODPOLIS in the coming domestic brands, prompting Korean future. brewers to pump up imports of Japanese Another company, POLA R&M, brands. About 45 million liters of imported already has a recognized market share beer was sold in Korea last year, up 11 of edible cosmetics in Korea and percent from a year ago. Japanese beer would like to set up an R&D center in was the most popular with 18,252 tons FOODPOLIS to advance into China, worth $12.35 million sold, followed by one of the biggest consumer markets Dutch (9,509 tons worth $10.92 million) in the world. POLA R&M is a subsidiary and American (5,601 tons worth $8.82 of POLA ORBIS GROUP and accounts million), according to statistics from the for 3rd largest cosmetic market share Korea Customs Service.

Mr. Tetsuro Yamamoto, TTC Japan CEO

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Japan Health & Nutrition Food Association Investment meeting with Japan Food Chemical Newspaper

Investment meeting with Bizen ChemicalNewspaper

Investment meeting with Takano Foods Investment meeting with Marukome

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Investment meeting with UBM

Imported beer still accounts for only investment option in Korea and hoped to about 4 percent of the annual Korean exchange mutual concerns and fruitful beer demand, which amounts to 3.5 information in the future. trillion won. The share of imported beer According to Chairman Park’s next used to be in the 3 percent range two plan, FOODPOLIS is going to make to three years ago, but is now nearing 5 another investment IR and one-on-one percent. business meetings in Tokyo and Osaka Hiscot Co., a subsidiary of Hite-Jinro in October and he will make all efforts to Group, has imported Kirin’s premium meet Japanese food investors demand bottled beer Ichiban Shibori since to attract their manufacturing plants and 2004, and added canned beer and draft R&D centers into FOODPOLIS. beer to its import list this year. Hite- Jinro is reviewing domestic production Door Knock Mission to U.S.A of Kirin beers through a technological partnership. FOODPOLIS successfully held an Kirin officials said that the project investment seminar at Baltimore World of FOODPOLIS would be a charming Trade Center, Maryland State, U.S.A on

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Investment meeting with POLA R&M

August 20th. More than 20 American scores to the strongly competitive tax a careful look at the project site and Food manufacturers and R&D officials exemption and subsidies program that supporting facilities. expressed a strong interest in the mega FOODPOLIS provides. In particular, R&D Based on the fruitful meetings in food project. Maryland is the center of the official showed great satisfaction with Maryland, FOODPOLIS is going to hold Boston-Atlanta Corridor on the Atlantic 3 core R&D supporting facilities and its more investment seminars in in Los sea line. The state borders Washington, assistance programs. Angeles and New York in November 2013. D.C., the nations capital. Among the 50 After the seminar, FOODPOLIS had US states, Maryland ranks 42nd in size and individual investment meetings with 19th in population. Its median household participants and Chairman, Philip J of income is the highest among all states. Tulkoff Food Products. Mr. Philip said Approximately 90 percent of Maryland’s that Tulkoff is paying a strong attention 5.6 million residents live in the Maryland to the potential growth of Asian Food portion of the Washington-Baltimore- market to diversify its business portfolio, Northern Virginia Combined Statistical so FOODPOLIS is going to be the ideal Area. destination to advance in the Asian Food i If you are interested in the FOODPOLIS During the investment seminar, market. In addition, FOODPOLIS will invite Investment Seminars, please contact many food manufacturers awarded high Chairman Philip to Korea in order to take [email protected].

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1 Cha-rye-sang

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Thanksgiving Food

Chuseok is a major harvest festival and a three-day holiday in Korea celebrated on the 15th day of the 8th month of the lunar calendar. Like many other harvest festivals, it is held around the Autumn Equinox. As a celebration of the good harvest, Koreans visit their ancestral hometowns and share a feast of Korean traditional food.

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4 5 3

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1 Cha-rye-sang

2 Songpyeon

3 Sujeongwa

4 Tteok

5 Jujube

6 Sanjeok

7 Jeon

8 Hangwa

One of the major foods prepared and Korean history, there was a Korean with natural colors and textured with eaten during the Chuseok holiday is legend saying that these two shapes ruled patterns. Hangwa is made with highly Songpyeon, a Korean traditional rice cake the destinies of the two greatest rival nutritious ingredients, such as rice flour, which contains stuffing made with healthy kingdoms, Baekje and Silla. During the honey, fruit, and roots. People use edible ingredients such as sesame seeds, black era of King Uija of Baekje, an encrypted natural ingredients to express various beans, mung beans, cinnamon, pine nut, phrase, “Baekje is full-moon and Shilla is colors, flavors, and tastes. Because of walnut, chestnut, jujube, and honey. When half moon”, was found on a turtle’s back its decoration and nutrition, Koreans eat making songpyeon, steaming them over a and it predicted the fall of the Baekje and Hangwa not only during Chuseok, but also layer of pine-needles is critical. the rise of the Silla. The prophecy came for special events, for instance, weddings, The word “song in songpyeon means true when Silla defeated Baekje in their birthday parties, and marriages. The most a pine tree in Korean. The pine needles war. Ever since, Koreans started to refer famous types of Hangwa are Yakgwa, not only contribute to songpyeon’s to a half-moon shape as the indicator of Yugwa, and Dasik. Yakgwa is a medicinal aromatic fragrance, but also its beauty the bright future or victory. Therefore, cookie which is made of fried rice flour and taste. Songpyeon is also significant during Chuseok, families gather together dough ball and Yugwa is a fried cookie because of the meaning contained in and eat half-moon shaped Songpyeon that also refers as a “flower of Hangwa”. its shape. Songpyeon’s rice skin itself under the full-moon, wishing themselves a Dasik is a tea cake that people enjoy with resembles the shape of a full moon, brighter future. tea. but one it wraps the stuffing, its shape Another popular Korean traditional Other foods commonly prepared are resembles the half-moon. food that people eat during Chuseok is japchae, bulgogi and fruits. Since the Three-Kingdoms era in Hangwa. It is an artistic food decorated

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Jeonju is a capital city of North Jeolla Province. It is an important tourist center famous for Korean food, historic buildings, sports activities and innovative festivals.

Located in the fertile Honam plain, home cooking handed down through famous for strawberries and exceptional generations over thousands of years, its produce, Jeonju has been an important active public and private food research, regional center in the province for a system of nurturing talented chefs, centuries. Once, the city was the capital and its hosting of distinctive local food of Hubaekje Kingdom, which was founded festivals. by Gyeon Hwon. The city was regarded Korea’s most famous international as the spiritual capital of the Joseon dish Bibimbap, originated in Jeonju. Dynasty because the Yi royal family There are many hypotheses regarding originated there. the origins of the bibimbap; from the Jeonju was given metropolitan status royal table, a ritual food, the Donghak in 1935, and the city was founded in revolution, a farming season food or 1949. In May 2012, Jeonju was chosen as royal flight during war time; but the a Creative Cities for Gastronomy as part most reliable of these is the royal table of UNESCO's Creative Cities Network. origination. This honor recognize the city's traditional It was first served at the royal table

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but was then passed down and spread amongst the lower classes. According to records, people started to eat bibimbap in Jeonju two hundred years ago. Jeonju bibimbap owes its popularity to perfectly steamed rice topped with freshly-cut vegetables (10 different ingredients in Jeonju) combined with the excellent cooking skills of the local women. Also, Kongnamul Kukbap (bean sprout soup) is a well-known remedy for hang-overs while the Jeonju Table d’hote is the true and genuine highlight of Jeolla-do cuisine. However, Jeonju is a must-visit destination, not just for the tasty food, but also the many treasures including a Traditional Korean village. It is recommended that tourists visiting Jeonju, begin at this unique village.

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The village area includes a traditional foreigners. Festival and Jeonju Paper Culture Festival hot spring and is surrounded by many Aside from the Hanok Living which highlights some of Jeonju's most popular tourist spots. This is a must-see Experience Center, there are many other celebrated items including traditionally for foreign tourists. great places to visit, such as the Pan made Korean paper, fans and igang wine. Other cultural gems include Asia Paper Museum, Jeonju World Cup Jeonju is a major transportation hub, Pungnammun Gate, Jeonju Confucian Stadium, and Deokjin Park. Deokjin Park so getting there doesn’t present much School, Jeonju Traditional Life Experience delights visitors in July and August with of a problem. The quickest way is to take Park, Jeonju Traditional Craftworks Lotus flower plants reaching heights of the KTX from Seoul’s Yongsan Station Exhibition Hall, Jeonju Treasures Center, several feet high. If you have additional to Iksan, and transfer to another train to Gangam Calligraphy Museum, Jeonju time, try visiting the nearby cities of Jeonju. The trip takes about 2 hours, 30 Traditional Culture Center, and Jeondong Namwon, Muju, Jinan, and Jeongeup. minutes in total. There are cheaper trains Cathedral, well known in Korean Catholic During the autumn months, the Jeongeup that go directly to Jeonju from Yongsan, history. In addition, the Jeonju Traditional mountain area is beautiful with its but they’re much slower and they tend to Culture Center gives visitors the unique incredible fall foliage. fill up on the weekends. experience of life in a traditional Korean The spirit of Jeonju can be found in house, known as 'Hanok' in Korean. its lively festivals. Some of these festivals The Jeonju Hanok Living Experience include the Jeonju International Film Center also gives visitors traditional Festival, Jeonju Daesaseupnori, Jeonju style accommodations in a comfortable Sori Music Festival, World Calligraphy i Check out more information at setting. This is a great experience for Biennale of Chonbuk, Jeon Pungnam http://www.jeonju.go.kr/

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