As Samyang Foods decided to move its headquarters to Myeong-dong in Jung-gu, Seoul, in January next year, Seongbuk-gu is on edge. With one of the few representative corporations in the area leaving, there are concerns about a decline in foot traffic, a shrinking commercial district, and reduced local vitality.
Samyang Foods is counted, along with 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 accounts for 30% of Seongbuk-gu's total local corporate income tax collections.
As Buldak spicy ramyeon has established itself as a leading K-food export, sales and operating profit have surged, and the amount paid in local corporate income tax has increased along with corporate tax.
In principle, a decrease in the district office's local corporate income tax intake does not directly affect the district's finances. Local corporate income tax is a special city tax, and the collections accrue to the Seoul Metropolitan Government. Because the headquarters moved within the same Seoul jurisdiction, the city's overall local corporate income tax does not decrease.
However, an official at the administrative authority said that because the district office is remitting a smaller amount of local corporate income tax to the city, the district could be pushed down the priority list in future city-to-district financial allocations.
Samyang Foods' current headquarters in Hawolgok-dong sits on the site where its factory stood at the time of its founding in 1961. Below the Hawolgok-dong headquarters plaque, there is a note that reads, "On Sept. 15, 1963, the first ramyeon in Korea was produced here."
Samyang Foods initially placed its headquarters in Jongno and produced products only in Hawolgok-dong, but during the IMF foreign exchange crisis, it sold its Jongno headquarters building due to management difficulties and transferred its headquarters to Hawolgok-dong.
Chasing Nongshim and Ottogi, Samyang Foods saw sales surge as "Buldak spicy ramyeon," launched in 2012, became an unprecedented hit. The corporation's value grew tenfold in 10 years.
As the company grew, it expanded hiring, which led to the headquarters move. A Samyang Foods official said, "We decided to transfer the headquarters to Myeong-dong, considering the lack of office space, securing personnel, and conditions for attracting outside talent."
Within Seongbuk-gu, there are concerns about a blow to the local economy. With some 600 headquarters employees leaving, there are projections that neighborhood commercial districts will decline.
Local residents also expressed regret. That is because Samyang Foods has consistently taken part in supporting the local community. Samyang Foods and the Samyang Foundation have actively sponsored events held in Seongbuk-gu, such as the combined sports festival for local child centers. They have also regularly supported the Seongbuk-gu Association of Organizations for the Disabled and the Seongbuk-gu Sports Association for the Disabled.
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," voicing disappointment.
Samyang Foods said that even if it relocates its headquarters, it plans to keep the Hawolgok-dong site as a logistics and sales hub. A Samyang Foods official said, "The new Myeong-dong office has the drawback of limited parking space," adding, "Given the nature of a food company, logistics and sales are very important. We plan to continue handling logistics functions in Hawolgok-dong." It sounds like it will not sever its ties with Seongbuk-gu.
An official at the Seongbuk-gu Office said, "Seongbuk is adjacent to the city center and has very well-developed transportation, but until now it has been viewed only as a residentially dense area," adding, "Seongbuk-gu is the basic local government with the most universities in the country and has a wealth of young talent. We hope innovative corporations will take interest."