Hanwha Solution said Monday it is poised to build an industrial complex for manufacturing semiconductors and auto parts in Hwaseong, Gyeonggi Province, in a move to offset its sluggish oil and gas business.

According to the company, Hwaseong City has approved its business plan to construct the industrial zone, called H-Techno Valley.

With a joint investment worth 380 billion won ($296 million) by the firm and the city government, the construction project is scheduled to be completed by 2027 in the key southern part of the metropolitan area. Korea’s chip manufacturers and automakers will set up their production bases here, the company said.

The large-scale business district is expected to create 7,000 new jobs and create an economic effect of some 3.22 trillion won, it added.

The industrial area is in close proximity to a semiconductor cluster located in Hwaseong and Pyeongtaek, as well as an automotive cluster that connects major cities in Gyeonggi Province and South Chungcheong Province.

Following the go-ahead from Hwaseong, Hanwha Solution plans to start reimbursing landowners within the area and a subscription program for those considering starting a business in the complex. Over 100 companies have already submitted a letter of intent to move in, the company said.

“We will do our best to accelerate the construction project, under the goal of creating a smart industrial complex that can optimize business management,” said an official from Hanwha Solution.

In 2021, Hanwha Solution and Hwaseong City agreed to hold an 80 percent and 20 percent stake in the H-Techno Valley, respectively.

Industry insiders say the company’s move toward venturing into new industry sectors comes as its traditional oil and gas business is going downhill, driven mostly by falling crude prices amid global economic slowdown.

As of the first quarter this year, Hanwha Solution’s chemical division saw its sales revenue and operating profit plunge on-year by 13 percent and 86.9 percent to 1.35 trillion won and 33.7 billion won, respectively.

Meanwhile, its renewable energy division posted a surge in sales to 1.37 trillion won, up by 48.4 percent compared to a year earlier. Operating profit came to a record high of 245 billion won since 2011, when the company began the solar panel business.