Busan invites applications for third phase of popular industrial park

The Busan Port Authority (BPA) of South Korea is seeking applications for locating business bases in an industrial park developed behind Busan port under Phase 3 of the Busan hinterland development project.

The notice states that the BPA will accept applications internationally from enterprises falling into two categories: (1) companies engaged in commodity handling, transportation, storage and display business and (2) enterprises engaged in integrated logistics services, such as international transport service arrangements, international ship trading and cargo packaging, repair, processing and assembling businesses.

The BPA had originally planned to open the industrial park developed under Phase 3 of the hinterland development project in 2008. But applications for locating business bases in industrial parks developed under Phases 1 and 2 have proved to be bigger than expected and the number of enterprises wishing to advance into the area has been increasing fast, so the BPA has decided to open the Phase 3 park earlier.

The hinterland development project is being promoted in parallel with the terminal development at Busan New Port which opened for service in January 2006.

Currently, three berths are in operation at the terminal and the BPA has chosen enterprises advancing into the industrial park being developed under Phase 2 of the project. A total of 17 business consortia and companies applied for Phase 2 tender, and the BPA eventually chose seven of them, including Japan’s Daiso-sangyo, the proprietor of a large discount-store chain.

A key difference between Korean and Chinese ports that is perhaps not fully appreciated by a wider audience is that in China the ports have been decentralised leading to a glut of terminals coming out supported by municipals rather than devised with the support of central government.

In Korea, central government is still behind the overall ports policy, which means potential customers should know and be reassured by the fact that government subsidies will continue at least until the stated aim of northeast Asia hub status has been achieved. This goes not just for competitive port charges, but also the incredibly cheap logistics park areas on offer near the ports.

On the transpacific, Busan’s position is 450 miles or a day nearer than Shanghai to Los Angeles.The position of the port means pilotage fees and times are dramatically less than in China. And feeder rates between China and Korea are rock bottom.

Likewise, with the costs of Japanese ports being prohibitively expensive, the ports on the Korean peninsula must position themselves as the mother port for Japanese in-and outbound cargoes. Another bonus of the location of Korea’s ports is that, generally, they are not open to the elements,being open for as much as three weeks more than Yangshan in a year.