WASHINGTON: Korea’s port-based industrial parks have emerged as a new destination for foreign companies seeking to capitalize on the nation’s geographical advantage of being at the center of Northeast Asia. Over the past few years, dozens of Korean and non-Korean logistics firms have established a foothold in the hinterland areas of Busan and other major ports, making the best use of Korea’s extensive maritime transportation networks across Asia.
In addition, a growing number of manufacturing and services companies have begun knocking on the door, expressing intent to set up operations in port areas. The Ministry of Oceans and Fishers said Monday that it has been gearing up to attract more foreign businesses to transform port-oriented industrial complexes into international business hubs.
“Thanks to Korea’s advanced maritime networks to major ports in China, Japan and Southeast Asia, companies operating in the hinterland of local ports can more effectively transport products to their destinations in Asia,” a ministry official said. “Industrial parks near domestic ports have become the country’s new engine of growth, strengthening its position in the international logistics network. We are now trying to persuade dozens of global companies to establish their units in the parks.”
Since 2006, Korea has built industrial complexes in areas surrounding its five major ports: Busan, Incheon, Gwangyang, Pyeongtaek-Dangjin and Ulsan. This was aimed at turning the ports into leading logistics hubs by attracting not only shipping companies, but also manufacturing and services firms. In particular, complexes in Busan, Gwangyang and Pyeongtaek-Dangjin are located inside free trade zones, offering businesses a wide range of benefits, including reduced rent and tax exemptions.
“Businesses operating in the industrial park near Busan Port, which is the world’s sixth-largest container port, can take advantage of the port’s extensive maritime transport web,” the official said. “It offers all possible services shipping firms need in order to transport cargo to their destinations in the most cost-effective and efficient manner. It has so far attracted 110 billion won in foreign investment.”
Currently, 68 Korean and non-Korean companies operate in the Busan Port industrial park. Incheon Port has also successfully developed its industrial park thanks to its geographical proximity to major Chinese ports. It has 30 logistics companies.
Gwangyang Port has been a popular place for both domestic and foreign logistics firms dealing with a range of steel and chemical goods. POSCO operates a steel mill nearby, while a number of refiners and petrochemical firms make products 24 hours a day. Pyeongtaek-Dangjin Port has also become an ideal place for logistics firms that handle automobiles, semiconductors and other industrial goods, produced by companies in Gyeonggi Province.
“We expect more and more foreign companies will come to set up plants in port-oriented industrial parks. So the government will set aside more sites around the five major ports for such use,” the official said. “At the same time, the government is considering expanding incentives for foreign businesses, particularly manufacturers.”
Currently, manufacturing companies pay twice as much rent as logistics firms in the complexes. The ministry plans to halve this. “For the foreign business community here, we will organize more sessions to publicize the benefits of being in port-based industrial parks,” the official said. “Last November, we held four sessions across the country for members of U.S. Chinese, European, Japanese chambers of commerce. We will continue to carry out aggressive marketing activities and seek ways to make the country’s port areas more foreign business-friendly.”