Olivia EvansLouisville Courier Journal
Since Kentucky opened an office abroad in Japan, it's helped attract 199 businesses and more than 45,000 full-time jobs in the commonwealth.
Now Gov. Andy Beshear sees similar potential with South Korea, officially the Republic of Korea.
Over the last decade, Kentucky has formed a business and trade partnership around electric vehicle batteries, auto parts manufacturing and bourbon, with the small Southeast Asian country some 6,900 miles away from the commonwealth.
Since 2020, that relationship has grown drastically, featuring $6.15 billion in investments into the state from South Korean companies including SK On, Ford Motor Co.'s partner on its Glendale battery park, and more than $100.5 million of Kentucky agriculture goods shipped overseas to the country.
Drawing on that success, Beshear wants to include $500,000 in each fiscal year in the 2024-26 state budget to open a business and economic development office in South Korea.
His budget proposal supports working with representation in South Korea to create an office where both Kentuckians and South Koreans will work to "attract new projects and expansion opportunities for South Korean businesses located in or considering Kentucky."
"When you look at the economy of the future that we are moving to, Korea has a very specific place in it," Beshear told the Courier Journal.
However, when House Republicans released their 2024-26 budget proposal in House Bills 1 and 6 on Jan. 16, there was no mention of providing funding for an office in South Korea, a decision about which Beshear has been vocal.
“They eliminated funding for the South Korean office,” Beshear said on Jan. 18.“I mean this is a place where we can be incredibly competitive where we’re seeing major investments, it’s a half a million dollars in a $120 to $136 billion budget, very shortsighted.”
As the executive office and legislature debate the need for the business and economic development office, here's a look at how Kentucky and South Korea are currently working together.
Has Kentucky opened foreign business offices before?
Currently, Kentucky has an office in Germany and another in Japan. Kentucky previously had an office in China, but it's now closed.
The Japanese office is what Beshear would like to recreate in South Korea. It opened following the massive investment by Japan-based Toyota Motor Corp. with the development of Toyota Motor Manufacturing, Kentucky — which remains Toyota's largest vehicle manufacturing plant in the world.
"It's something that absolutely worked and fostered so much more Japanese investment that we now want to see with Korea," Beshear said.
South Korean manufacturing creating jobs for Kentuckians
A hallmark of Beshear's first term was the $5.8 billion announcement of the BlueOval SK Battery Park in Glendale, a joint venture between Ford and South Korean company SK On, that promises to bring 5,000 jobs to Kentucky.
Jae-won Chey, the executive vice chairman of SK On, said Kentucky may be best known for bourbon and horse racing, but it will soon be known globally for the production of electric vehicle batteries, the Courier Journal previously reported.
"Right here in Glendale will become the global hub of battery industry," Chey said at the 2022 groundbreaking of the battery park.
Beshear has repeatedly touted the battery park as the "largest investment in Kentucky history," helping cement the commonwealth as a key leader in the transition to electric from gas-powered vehicles.
"[South Korean] EV technology is more advanced than most of the rest of the world, and so they are a perfect partner for Kentucky to ensure that we are an automotive leader, if not the automotive leader," Beshear said, noting the Asian country has been in the EV world much longer than the U.S.
Across the state, six counties — Boone, Fayette, Taylor, Jefferson, Simpson and Hardin — are home to South Korean companies such as Lotte Aluminum Material, employing 122 workers, and INFAC North America which recently announced an expansion and creation of 220 new jobs.
While these companies provide jobs and investment in Kentucky, the businesses also benefit from the state's geographical location and ability to reach 60% of the U.S. population in one day as well as global shipping hubs like UPS Worldport in Louisville and DHL Global Superhub in Northern Kentucky.
What Kentucky agriculture products are exported to South Korea?
South Korea is a major agriculture importer of U.S. goods, thanks in part to theU.S.-Korea Free Trade Agreement, which started in 2012 and eliminated tariffs and other barriers in trade.
South Korea is "generally" in the top 10 of Kentucky's foreign agriculture customers, according to data provided by University of Kentucky Department of Agricultural Economics to the Kentucky Department of Agriculture. South Korea directly imported more than $30 million worth of Kentucky agriculture in 2022 and will shatter that amount in 2023, with exports totaling $35.5 million for the first 11 months of last year.
Kentucky provides a market to South Korea of "value added" products like bourbon and horses alongside traditional agriculture products like grains and proteins, said former Kentucky Department of Agriculture Commissioner Ryan Quarles.
The five products South Korea imports from Kentucky the most are distilled spirits (think bourbon), live animals (think racehorses), pork products, forest products, and sugars and sweeteners.
Quarles, who was the first agriculture commissioner in Kentucky to travel to South Korea for a trade show in September, said there is "tremendous market power" in South Korea and the demand the country has for Kentucky agricultural commodities is helping to directly increase the profitability of Kentucky farms.
“At the Kentucky Department of Agriculture, our focus is supporting Kentucky producers and guiding the future of agriculture. I am eager to develop and bolster trade partnerships, in addition to working with the Cabinet for Economic Development and others to build greater profits for our farmers," said newly elected Agriculture Commissioner Jonathan Shell.
In his new role as President of Kentucky Community and Technical College System, Quarles, a Republican, said he sees Beshear's proposal for an office in South Korea as beneficial to the agriculture industry but also the community and technical college systems, where he can tailor manufacturing training and other training towards what South Korean businesses need in the workforce.
"I've always been a leader on international trade in Kentucky, long before I went to KCTCS," Quarles said. "This is just another example that if you want to move the needle on economic development you have to look at the 95% of consumers of this world that live outside the United States."
Contact business reporter Olivia Evans at oevans@courier-journal.com or on X, the platform formerly known as Twitter at @oliviamevans_.
