As Samyang Foods decided to move its headquarters to Myeong-dong in Jung-gu, Seoul, in January next year, Seongbuk-gu is in upheaval. With one of the few representative corporations in the area leaving, there are concerns about a decline in foot traffic, a contraction of commercial districts, and reduced local vitality.
Samyang Foods is counted alongside FILA Holdings Corp. (Misto Holdings) as a representative corporation of Seongbuk-gu.
According to the Seongbuk-gu Office on the 28th, the size of the local corporate income tax paid by Samyang Foods amounts to 30% of the district's total local corporate income tax collections.
As Buldak spicy ramyeon has established itself as a flagship K-food export item, revenue and operating profit have surged, and the amount of local corporate income tax paid, along with corporate tax, has grown.
In principle, a decrease in the district office's local corporate income tax receipts does not directly affect the district's finances. Local corporate income tax is a special city tax, and its proceeds accrue to the Seoul Metropolitan Government. Because the headquarters moved within the same Seoul jurisdiction, the city's total local corporate income tax does not decrease.
However, an official at an administrative authority said that to the extent the district office collects less local corporate income tax to remit to the city, the district could fall in priority in future city allocations to districts.
Samyang Foods' current headquarters in Hawolgok-dong is the site where its factory stood at the time of its founding in 1961. Under the Hawolgok-dong headquarters nameplate, there is a note that reads, "On Sept. 15, 1963, the first ramyeon in Korea was produced here."
Samyang Foods originally had its headquarters in Jongno and produced only products in Hawolgok-dong, but during the IMF foreign exchange crisis, it sold the Jongno headquarters building due to management difficulties and transferred its headquarters to Hawolgok-dong.
Samyang Foods, which had been chasing Nongshim and Otoki, saw sales surge as the "Buldak spicy ramyeon" released in 2012 became an unprecedented hit. The corporation's value grew tenfold in 10 years.
As the company grew, it increased hiring, which led to the headquarters move. A Samyang Foods official said, "Considering the lack of office space, securing personnel, and the conditions for attracting outside talent, we decided to move the headquarters to Myeong-dong."
Within Seongbuk-gu, there are voices worried about damage to the local economy. With more than 600 headquarters employees leaving, some project that neighborhood commercial districts will decline.
Local residents also express regret. That is because Samyang Foods has consistently taken part in supporting the local community. Samyang Foods and the Samyang Foundation for Culture and Social Contribution actively supported events held in Seongbuk-gu over the years, such as the joint sports festival of local child centers. The Seongbuk-gu Association of Organizations for the Disabled and the Seongbuk-gu Sports Association for the Disabled have also received regular support.
A local resident said, "I had pride that the headquarters of a corporation producing the globally hit product Buldak spicy ramyeon was in our neighborhood," expressing disappointment.
Samyang Foods said that even if it moves its headquarters, it plans to maintain the Hawolgok-dong site as a base for logistics and sales functions. A Samyang Foods official said, "The new Myeong-dong building has the drawback of limited parking space," adding, "Given the nature of a food corporation, logistics and sales are very important. We plan to continue handling logistics functions in Hawolgok-dong." It sounds like it will not let go of its ties with Seongbuk-gu.
An official at the Seongbuk-gu Office said, "Seongbuk is adjacent to the city center and its transportation is very developed, but until now it has been highlighted only as a residentially dense area," adding, "Seongbuk-gu is the basic local government with the most universities in the country, so it has an abundance of young talent. We hope innovative corporations will take interest."