Busan is good

Busan-Jinhae FEZ on track to become logistics hub

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Aiming to become a major logistics powerhouse in Northeast Asia, the Busan-Jinhae Free Economic Zone has embarked upon the ambitious task of developing itself into a business and residential locus for foreign investment.

Spreading over 102 square kilometers, the FEZ situated between the two southeastern port cities of Busan and Jinhae aims to attract investment in port construction and operation, hi-tech manufacturing, research and development, real estate development, establishment of international schools and hospitals, and construction of tourism and leisure facilities.

 

The Busan-Jinhae Free Economic Zone Authority said it expects to attract foreign investment of between $14.6 billion and $15.5 billion by 2020.

 

Since its establishment in 2004, the Busan-Jinhae Free Economic Zone Authority, under the leadership of commissioner Chang Soo-man, has already attracted a total of $4.6 billion in foreign direct investment and is expected to obtain $1.25 billion in the coming year.

 

"We are here to cooperate with foreign investors," said Commissioner Chang. "Our staff is ready and available to assist them in all their business needs."

 

As it strives to entice more and more foreign companies into its boundaries, the Authority will continue to cater to the administrative needs of its current investors in addition to supplying them with financial benefits and support.

 

By offering generous tax cuts and financial subsidies to foreign investors as well as government-invested infrastructure, the BJFEZ is transforming unused land in Busan and Gyeongsangnam-do into what is expected to become an economic growth engine for the region and a powerful business asset to the country.

 

Located along major shipping routes to North America and Europe, the BJFEZ has various feeder networks leading to ports in China, Japan and Russia. Connection to transcontinental railroads such as the Trans-Siberia Railway, Trans-China Railway and Trans-Manchuria Railway will also make BJFEZ a competitive port capable of meeting global logistics demands.

 

Easy access to the nation's industrial heartland is another plus. Automobile production plants accounting for 45 percent of the national output and the world's five largest shipyards are located in the vicinity of the BJFEZ.

 

Major projects within the zone include the Busan New Port which will have a total of 30 container berths by the time it is completed in 2011. Dubai Port World of the United Arab Emirates, Bouygues of France and ZIM Line of Israel are investing in the port construction and operation. Foreign direct investment for port construction totals at around $2,510 million including $500 million which is expected to come in 2007. The new port reached a milestone in its short history by opening the first three of thirty container berths in January last year. Three more berths are scheduled to be added in January 2007.

 

In relation to the Busan New Port's development, the hinterland area has seen keen competition for space within its logistics distribution park. Twenty-one consortiums comprising of 70 foreign and domestic companies invested around $620 million to engage in value-added logistics processes within the park.

 

The BJFEZ has also attracted major investments from high-tech manufacturers mostly from Europe and the United States. One of the most significant FDI cases comes from Renault Samsung Motors Co. which has invested $600 million to build a new engine plant within the BJFEZ. Other manufacturers related to the auto, aerospace and shipbuilding industries have set up shop in the zone's Busan Science and Industrial Park. The science and industrial park has become so popular that it has forced the Authority to develop an additional industrial area named Hwajeon Industrial Complex from October 2006. With such a great demand for industrial space within the zone, the Authority has netted $1,070 million in manufacturing investments and aims to attract an additional $50 million in 2007.

 

To balance out the port and manufacturing functions of the area, the BJFEZ is developing a new business town called the Myeongji International City. Located between the new port and Busan city, Myeongji International City will be home to upscale residential complexes, convention centers, shopping malls, office buildings, parks, international schools and hospitals. Its main target is to focus on attracting foreign companies and families but will also cater to the needs and desires of the domestic population.

 

Within Myeongji, around 20 square kilometers will be dedicated to Japanese business interests, currently being coined as Japan Town. The BJFEZ Authority plans to invite Japanese businesses, shopping malls, restaurants and a Japanese school to Japan Town. The Authority is currently seeking real estate developers to participate in the development of both Japan Town and Myeongji International City and has publicly announced that it will focus its energies on finalizing the process of setting up an international school and hospital within the BJFEZ.

 

Another development project within the zone includes the Ungdong Tourism & Leisure district. Here, the BJFEZ will take advantage of the stunning natural environment and mild climate unique to southeastern Korea and use it to capitalize on a greatly underserved tourism demand within the region.

 

Project details include plans for a golf course, beach resorts, condominiums and other amenities. Current investment projects include the construction of an indoor ski dome to be developed by U.K. developer SnowBox. Plans for a luxury water resort are also underway.

The $160 million resort consisting of artificial lakes, islands, condominiums and plantations will be built by Emerson Pacific and Morgan Stanley, and managed by Hilton International. In addition to these investments, the Authority plans to attract $500 million in FDI for the Ungdong area in 2007.

 

Regarding plans to set up a foreign hospital within the BJFEZ, a unit of the Harvard Medical School is conducting a feasibility study. The Harvard Medical International team visited Korea earlier this month to meet with related officials of the government and major university hospitals.

As ambitious as these plans may seem, the BJFEZ has already made significant headway in development.

The source of news : The Korean Herald  2006.12.26