Where should global capital expenditure go next? Using reshoring policies | KOTRA specialist Jung Sung-woo
- What to look for
- Explore whether reshoring requires closing every overseas factory and how domestic expansion, automation and mother factories enter the discussion. Compare locations while distinguishing program explanations from anonymous business accounts.
- Why it matters
- Separate the initial funding reduced by subsidies from recurring labor, logistics and tariff costs. Distinguish designation, investment plans and completed spending, and identify the applicable notice and effective date.
Timeline
8 segmentsThe guest uses an anonymous automotive supplier to illustrate how support can reduce initial funding needs. The amounts were not matched to public settlement records for that firm and are not presented as a standard award rate. Lower funding needs do not automatically double returns or IRR because cash flows, payment timing and performance conditions also matter.
An independent exercise, not a statement by the video creator or verification of every claim in the video.
Separate a one-time grant from recurring operating costs
Suppose both overseas and domestic plants require KRW 10 billion of investment, with an immediate KRW 4 billion grant available only for the domestic plant. Initial net investment is then KRW 10 billion overseas and KRW 6 billion domestically. If domestic annual operating costs are KRW 800 million higher and revenue and output are identical, the initial KRW 4 billion advantage is offset by 5 years of additional costs. This simple comparison excludes discounting, tax and residual value; an actual assessment must compare payment and clawback conditions and varying cash flows at a common valuation date.
Check for yourself
- Is the grant confirmed, which spending qualifies and when will it be paid?
- What is the annual cash-flow difference after yield, automation, logistics, tariffs and labor costs?
- Do retention obligations, clawbacks and overseas closure costs change the comparison?
Limits of application
These are hypothetical figures, not the anonymous firm’s results or an actual grant rate. Revenue and output are assumed identical and the annual cost difference constant; working capital, financing, exchange rates, construction delays and policy changes are excluded. The 5-year point only offsets the initial cost advantage; it is not an IRR or an investment recommendation.