BJFEZ, where your potential becomes reality
BJFEZ: An Outpost for a New Industry to be Born
-BJFEZ is set to become a global export hub-
-A new era unfolds for a strategic logistics hub through transformative industrial location policies-
“Busan- Jinhae Free Economic Zone (BJFEZ) will leap forward as the world’s best logistics hub based on Gadeokdo New Airport and Jinhae New Port, acting as two wings,” said Kim Ki-young, Commissioner of the Busan-Jinhae Free Economic Zone Authority, in an interview with The Korean Economic Daily on October 22. “The construction of Gadeokdo New Airport and Jinhae New Port is being visualized, marking one of the mega events not only in BJFEZ but also in the southeast part of Korea. This provides an optimal condition for BJFEZ to realize its vision, ‘The global hub for international business and logistics.’”
Recently, the Ministry of Land, Infrastructure, and Transport unveiled the basic construction plan of Gadeokdo New Airport, serving as a gateway airport for the southern part of Korea specialized in logistics, with a 3,500m- long runway operating 24/7. Simultaneously, the largest national project in Gyeongnam Province, the Jinhae New Port construction project, has commenced with large-scale construction orders. Jinhae New Port is projected to be completed as a large smart port by 2040, with a budget of KRW 12 trillion, accommodating 21 berths. With Jinhae New Port and Busan New Port becoming the world’s 3rd largest logistics hub port, handling 42 million TEU as of 2040 (1 TEU is a 20 feet container), BJFEZ, as the largest strategic point of northeast Asian logistics, is located at the center of the ‘tri-port’ covering air, port, and railways.
Commissioner Kim stated, “BJFEZ envisions a brighter future with the opening of Gadeok New Airport in 2029 and Jinhae New Port in 2040, securing unrivaled competitiveness both domestically and internationally. BJFEZ is poised to transform into a smart logistics platform, attracting businesses from all around the world.”
He emphasized the transition of industrial location policies in response to this trend. “Core industries such as machinery, shipbuilding, aviation, automobile, offshore, and shipbuilding equipment sectors form an industrial belt connecting Ulsan, Busan, and Changwon. We should lay the foundation for innovative future growth engine industries in BJFEZ. Meanwhile, the hinterland complex industrial location policies will be improved to nurture complex logistics combined with manufacturing and IT, positioning the zone as a center for local economic development.”
Commissioner Kim also added that the establishment of one- stop service systems, enabling logistics, manufacturing, processing, and exporting all together in the FEZ, will create high value in the hinterland. “The existing logistics businesses focusing on storage services in warehouses may experience a profitability decline in cut-throat competition. High-value-added creation means not only the maximization of profits but also an increase in sales and local employment, creating more values for the hinterland.”
For example, 90% of imported green coffee beans (170,000 tons or USD 880 million as of 2022) were imported through Busan New Port. However, most Busan-based companies were registered as logistics businesses unable to roast or process beans for export. The majority of green bean processing companies, located in Seoul, imported beans through Busan, processed and packed them in Seoul, and then sent them back to Busan for export.
Commissioner Kim said, “Creating high value- added for businesses and local employment requires facilitating hybrid logistics services in hinterland complexes. We will continue to consult with relevant governmental bodies and institutions for businesses enabling manufacturing and logistics services simultaneously. The coffee industry is one of ten pilot items closely associated with daily life.”
Moreover, the BJFEZ Authority has been trying to deregulate based on challenges that tenant companies faced. Last year, the Authority led the increase of investment in logistics centers from KRW 50 billion to 150 billion by relaxing the building height limit from 40 m to 60 m. Another success story involves easing hinterland land size limits (an original limit of 150,000 m2 per a single tenant company in the hinterland).
BJFEZ is equipped with optimal location conditions thanks to the establishment of logistics connections with seaport, airport, highways, and railways. Active deregulations, such as the relaxation of construction height limit and land size limit to lease, further enhance its appeal to businesses.
Commissioner Kim explained, “Wasung District will become the first case to claim the land and construct buildings concurrently for a KRW 2 trillion global advanced complex logistics center. BJFEZ will become a hub with the world’s third-largest mega port, as well as the best logistics hub for Northeast Asia, by the expansion of Busan New Port, Ungdong Distripark (on-sale), and West Distripark (announced for lease). Wasung District is expected to play a role as an outpost of global logistics, driving economic growth in southeast Korea.”
He also added, “The BJFEZ has turned toward the creation of high-value-added industries and the fostering of new sectors according to the changing industrial structures from machinery and manufacturing to services and complex logistics industries in southeast Korea. We will nurture logistics centers around Busan New Port, focusing on overseas direct purchases and the cold chain.”
These efforts helped BJFEZ earn the 'S- class' designation consecutively for two years, achieving the highest grade in the performance evaluation of nine FEZs in Korea by the Ministry of Trade, Industry, and Energy, including the current year. Commissioner Kim stated, “We are proud to be recognized for actively attracting investment in value- added complex logistics and global advanced industries while deregulating and addressing complaints of tenant companies. We will strengthen our advantages and overcome shortcomings in this result. The Authority will never stop making efforts to make BJFEZ the largest global logistics hub of Northeast Asia, as well as an outpost of advanced industries in the future, based on Gadeokdo New Airport and Jinhae New Port.”