Global financiers eye Busan-Jinhae FEZ

 

Global financiers and multinational companies increasingly eye the burgeoning Busan-Jinhae Free Economic Zone as basic infrastructures spring up there and as a wide variety of economic incentives are offered.

 

A recent investment decision well demonstrates the trend.

 

A group of local and overseas financiers are set to build a foreign medical institute in an effort to address the growing needs for advanced medical services for foreigners and visitors in the Busan-Jinhae FEZ.

 

The BJFEZ Authority announced that it had struck an investment deal with KNC Capital Advisors, Woori Bank and ABN AMRO in Hong Kong to lure an international medical center in the fast-growing economic zone.

 

The authority added a specialized U.S. consultancy which will conduct a feasibility study within this year to glean detailed information regarding the prospective construction project.

 

The establishment of foreign medical institutions within Korea's Free Economic Zones is expected to partly help attract foreign investment by improving living and working environment for investors and employees.

 

S.F.S. Ltd., a Shanghai-based shipbuilding part maker, and Shinsegae International Corp. are also set to build a joint manufacturing venture in the Busan-Jinhae Free Economic Zone in an effort to tap the world's largest shipbuilding market in the region.

 

The Busan-Jinhae FEZ Authority said that the joint venture company will establish a $10 million plant by 2009, aiming at supplying vessel parts to the fast-growing Korean shipbuilding market.

The company also plans to tap the overseas markets, including Europe, China and Japan, as the global shipbuilding industry is largely expected to rapidly grow on soaring international trades.

The investment decision also demonstrates that the nation's FEZ projects are gaining momentum with the foreign direct investment of $234 million secured in Busan and Jinhae so far.

 

The BJFEZ is adjacent to Ulsan, South Gyeongsang Province, where many major shipbuilders such as Hyundai Heavy Industries Co. are located, offering geographic advantages to the part maker.

 

As the Northeast Asian economy rapidly expands - with China moving to the forefront - Korea aims to become an industrial and logistic hub in the region's growing markets.

 

At the center is the Busan-Jinhae FEZ, which is ideally located on the southeastern coast of Asia's third-largest economy. It will serve as a base for foreign investors seeking an efficient site to tap into China and Japan.

 

Designated as a Free Economic Zone in 2003, the free economic zone has already begun the process of transforming itself into a top-class world business hub.

 

By 2011 it will be home to a new 30-berth container port to promote faster and more efficient logistic services for investors.

In addition to its plans for creating state-of-the-art port facilities, the 104.8 square kilometer BJFEZ will also have an area for manufacturing, a new international business district, the Busan Science & Industrial Park for R&D centers, an International Business City, an area hosting foreign schools and hospitals as well as a tourism and leisure district.

 

Foreign investors are not only attracted to the capabilities of the New Port, but they are also interested in the already existing industrial belt in the neighboring areas.

 

Many local and foreign-invested manufacturers have already established large-size industrial masses, which include major automakers and oil refineries.

 

The area is also home to world-class aerospace and machinery companies and logistic businesses as well.

 

The BJFEZ's strategic location between China and Japan also adds to its list of merits. It is located along major shipping routes to North America and Europe and has various feeder networks leading to ports in China, Japan and Russia.

 

On the back of such business charms, a wide variety of industries have been lured into the free economic zone and have settled there.

 

The UK leisure facility developer SnowBox will invest $200 million into the construction of an indoor ski dome with a shopping center, hotels, etc., while Renault Samsung Motors will make the BJFEZ its Northeast Asian base by investing $600 million into the construction of a new engine plant.

 

Other investments include the American company NKCF which will construct a $40 million compressed natural gas tank and jumbo cylinder plant within the zone and the U.S. manufacturer AMT which will plow $50 million into the establishment of an aluminum wheel factory.

 

Likewise, Regent Aerospace, also from the United States, intends to construct a $20 million factory which will produce in-flight entertainment systems for passenger airplanes.

 

(kkt@heraldm.com)

 

By Ko Kyoung-tae

2006.08.07