A Study on the optimal model for the expansion of integrated supply system of customized industrial water to strengthen corporate competitiveness

RO, Kyung Yool

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Looking at the domestic industrial water supply system, a water service provider (local government or K-water) supplies only general-purpose industrial water (raw water, purified water, and settled water), and the consumer uses the water provided by the water service provider after additional water purification to suit its application (e.g., cooling water, boiler feed water, washing water, etc.) and water quality. Therefore, companies that require high-purity industrial water such as semiconductor, display, petrochemical, and precision machinery industries directly install and operate additional water treatment facilities at their own expenditure to supply customized industrial water (pure water, ultrapure water) required for product production.

Even though there are professional water supply companies that supply industrial water, high purity industrial water that requires additional water treatment is produced and managed by the manufacturer itself, raising product costs and production risks and weakening corporate competitiveness.

In particular, when a large amount of industrial water is required for product production, the supply of industrial water in a stable and affordable manner through improvement of the industrial water supply system is a very important factor in enhancing production efficiency and corporate competitiveness because the cost of the water has a large effect on the product cost.

Taking this study as an opportunity, if a specialized water service provider expands the introduction of a system that integrates and supplies customized industrial water required by manufacturing companies, it will be possible to prevent duplicate investment in facilities and to supply industrial water efficiently at a relatively low unit price. It could lead to an improvement in the competitiveness of companies.

For example, in 2011, quantitative results were also proven through the successful operation of a customized integrated industrial water supply facility (K-water Daesan Industrial Water Center) installed in the Daesan Petrochemical Complex for the first time in Korea. However, since then, the spread of the integrated industrial water supply system has been sluggish.

Therefore, in this study, through a feasibility analysis of project expansion and a review of the project implementation method, an optimal business model and implementation plan were suggested, and efforts were made to secure new driving forces.

The conclusions drawn through this study are summarized as follows:

From a locational perspective, it was judged that the existing national industrial complex, where demanding companies were concentrated, was suitable as a business target in many aspects, such as securing stable demand and linking with government policies (regeneration of aging industrial complexes).

From an economic perspective, there is a difference depending on the availability of financial support, fluctuations in benefits and total project costs, and the quality of water required by customers, but it turns out that it is possible to secure stable economic feasibility when the scale capacity of the integrated supply facility is 50,000 ㎥/day or more.

From a policy perspective, this project is in line with the policy direction of the country that wants to secure its own technology for high-purity industrial water treatment, and the willingness of the government and K-water to pursue the project is clear, so it is possible to secure sufficient feasibility if uncertainties are resolved through thorough preparation and the customized industrial water integrated supply plan is reflected in the relevant high-level plan (2040 national waterworks maintenance basic plan, etc.).

In addition, as a result of comparing the strengths and weaknesses of various business methods including the national finance project, it is judged that the promotion in the form of government fiscal projects led by the government and K-water will be the most advantageous in many aspects (e.g., deciding on flexible rates in consideration of acceptability, enhancing project execution power, achieving effective business goals, etc.).

Now is the time for K-water, a state-owned enterprise specializing in the water sector, to actively strive to enhance the execution power of the project by reflecting the plan to expand the introduction of Integrated Supply System for Customized Industrial Water in government policies and inducing financial and institutional support.

Kim, Seong-han
KDI School, Master of Public Management
Issue Date
KDI School
Thesis(Master) -- KDI School: Master of Public Management, 2021
Water resources development--Korea (South); Water-supply
1. Executive Summary

2. Introduction

3. Literature Review and Case Study

4. Research Methodology

5. Analysis and Findings

6. Conclusions and Recommendations

7. Limitations and Further Research to be addressed in the future

8. References

9. Appendix
45 p
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