Iron oxide is produced as a by-product in cold rolling process of steel company and used in electric and electronic industries as an important basic material according to the uses. It is expected that production amount of iron oxide will increase for the next few years in Korea, because most of cold rolling mills are progressing or planning to expand their capacity. But, this iron oxide is mainly used as materials for a pigment or ferrite in Korea, and iron oxide for magnetic recording media is imported from foreign countries.
This study focuses on the method of localization of iron oxide for magnetic recording media in Korea, which increases value added and utilization of iron oxide produced in Korea, and supply electric and electronic materials to domestic company. For this, the research questions are:
1). Is commercial production of iron oxide for magnetic recording media in Korea possible?
2). What are the economic effects of iron oxide business?
The major contributions of this study are as follows: First, based on the survey of related data, necessary materials, demand from the customers and technical resources to produce of iron oxide for magnetic recording media in Korea are classified, and high possibility to succeed for localization business of iron oxide is identified. Second, the possibility of high economic profits are proved as internal rate of return 18.03%, net present value $17,092,776 and payback period of investment 6.3 years with 6.000 t/yr production capacity.