[20^th Anniversary of the Busan-Jinhae Free Economic Zone Authority ②]

Leap Forward as a New Growth Axis of the Korean Economy!

◈ Striving to become the largest global logistics center in Northeast Asia based on airport, port, and railroad Tri-port

◈ Establishing itself as a global complex logistics center by preempting new industries and actively innovating regulations

The BJFEZ Authority, celebrating its 20th anniversary this year, is leaping forward as a new growth pillar of the Korean economy and the undisputed logistics hub of Northeast Asia. The BJFEZ has become a magnet for logistics giants such as Coupang, Dongwon Loex Co., Ltd, and EMP Belstar.

The BJFEZ is the center of a logistics tri-port (air, port, and rail) that is a gateway airport to the world, a junction for Pacific Ocean cargo, and the starting point for land cargo in the southern region. With the upcoming opening of Gadeok New International Airport in 2029 and Jinhae New Port in 2040, tremendous growth is expected.

The BJFEZ Authority plans to maximize its geographical advantages and foster 'BJFEZ-customized high-tech new industries' linked to strategic industries based on excellent logistics infrastructure to help BJFEZ become a logistics hub in Northeast Asia.

◇Taking a Leap Forward as a Global Logistics Hub... Focusing on Cold Chain Logistics Industry!

The logistics industry has grown significantly as the demand for logistics has increased since the pandemic, and logistics is influencing the entire industry. By maximizing the advantages of the world's best logistics transportation network, BJFEZ Authority plans to strengthen its transportation competitiveness by promoting high-value-added logistics industries such as logistics + manufacturing and logistics + IT, as well as fostering the cold chain fulfillment service industry to attract large-scale global delivery centers (GDCs).

According to the results of the '2023 Corporate Logistics Cost Factual Survey' released by the Korea Chamber of Commerce and Industry in February, which surveyed about 1,500 manufacturing, wholesale, and retail companies nationwide, the share of logistics expenses for constant-temperature products that need to be delivered at a certain temperature, such as frozen and refrigerated items, increased 4.6 times from 7.9% in 2016 to 36.3% in 2022. This is likely due to the recent expansion of the online shopping market, which has led to a surge in customer demand for cold chain services.

In line with these industry trends, BJFEZ Authority is moving quickly. Starting in the first half of this year, it plans to operate a 'Cold Chain Alliance' with the Korea Institute of Industrial Technology, led by global cold chain companies in the jurisdiction, and involving companies, institutions, and experts in the cold chain field. Through this, they plan to foster a cold chain industry optimized for BJFEZ.

Kim Ki-young, Commissioner of the BJFEZ Authority, said, "Change will come when industry groups, researchers, and institutions, led by leading companies, join forces to find the potential for industry development and start research and development." He added, "We will make the zone a place where global companies can focus their attention and investment through continuous analysis and institutional improvement, including technology development tasks, government requests, and global cases."

Additionally, the BJFEZ Authority will expand the development of related industries such as cold chain, cold storage, and refrigerated containers. Eventually, they will form a cluster and make BJFEZ a leading base for the cold chain logistics industry.

◇ Finding a Breakthrough in the Rapidly Changing Industrial Ecosystem by 'Value-Added Port distripark'

While the logistics industry in the early days was only a simple cargo handling function, it has recently become more important as related industries such as manufacturing and processing are expanding. In response, the BJFEZ Authority is working in various ways to create high value-added in the logistics industry, which is currently limited to simple storage.

The first is the creation of a coffee cluster in the port distripark. Busan Port is the gateway for about 96% of imported coffee beans. However, logistics companies that import green coffee beans in the port distripark cannot directly roast or process them for export. To address the loss rate during the roasting process, which is the biggest obstacle, the BJFEZ Authority aims to standardize the loss rate for five strategic complex logistics items, including coffee. Based on the results of the service, they will continue to consult with relevant ministries and organizations to solve regulatory issues one by one.

The BJFEZ Authority's commitment to regulatory innovation is unparalleled. It is focused on improving regulations that are unnecessary or need to be improved to create a favorable environment for businesses. To efficiently utilize the scarce land in the port distripark, the BJFEZ Authority has eased building height restrictions (from 40m to 60m), leading to a 300% increase in investment in logistics centers (from KRW 50 billion to KRW 150 billion). Another easing of area restrictions was achieved in June last year, which is expected to lead to increased value-added and new cargo volumes for companies, creating large-scale employment and revitalizing the local economy.

To create high value-added for companies and jobs in the region, it is essential to revitalize additional logistics in distripark complexes. If logistics and processing are possible, related industries will gather in the port distripark, and the area is expected to form a huge industrial cluster.

Finally, the BJFEZ Authority plans to secure new growth engines for the future by transforming BJFEZ into a high-tech industry cluster, such as secondary batteries and bioindustries, starting with the coffee cluster in the port distripark. They aim to attract investment in high-tech new industries by supporting customized revitalization strategies and industrial upgrading for each district.

"Logistics is the center that controls the flow of all industries and the foundation of future cutting-edge new industries. BJFEZ, with its unrivaled location, will become the largest global logistics hub in Northeast Asia, sought after by the world," said Kim Ki-young, Commissioner of the BJFEZ Authority. "We will do our best to make our zone a mecca for future new industries and stand out as a new growth axis of the Korean economy by upgrading industries to meet trends and creating an innovation ecosystem."