GFEZ a Hub for Logistics,
New Advanced Materials
and Tourism

The rapid economic growth of China, as the third largest trading country in the world and the competition among countries in the region has been intensifying. GFEZ was designated on October 24, 2003 with the aim of making Korea a business hub of Northeast Asia. Another important reason for the creation of this economic zone is to develop the eastern region of South Jeolla Province and northwestern part of South Gyeongsang Province in order to achieve a balanced development within the country. The GFEZ authority was born on March 24, 2004 with the sole purpose of taking charge of spurring its industrial zones and foreign direct investment.
The Gwangyang Bay's average water depth is 17 meters and its consider the safest natural harbor in the region as it is surrounded by high mountains and an exceptional island in its middle that acts as the perfect breakwater barrier. This bay is home of the impressive the Gwangyang Container Harbor, and its current industrial belt includes POSCO's steelworks,
the largest crude steel producer in the world for a single company, and the 5th largest chemical industrial area; that of Yeosu National Petrochemical Complex. The area is also known for its scenic beauty as it is part of the Hallyo Marine National Park. Therefore the Korean government singled out the area for further development due to its excellent conditions for commercial and residential areas. The region thus, has a superb competitive advantage over other more expensive areas within Korea.
GFEZ will develop its surrounding areas in three stages slated for completion by 2020 at the cost of 13.187 trillion won and will try to entice $20 billion in capital both foreign and indigenous companies with its crown jewel the very large container terminal that will be able to handle 9.33 million TEU or containers per year. Its development plan has as its partners Gwangyang, Sunchon, and Yeosu cities in South Jeolla Province, and part of the Hadong County in South Gyeongsang Province. The total GFEZ area encompasses 27.33 million pyeong or 90.38 square Km. As of now, the GFEZ has attracted $2.640 billion from 15 companies including $1.5 billion by Ilsang Co., the developer of the Hwayang tourism area and if investments under negotiations were included, total investment capital would total around $3.414 billion.
The Development Plan:
(Development Plan By Region); Gwangyang area (14.64 square km) will have 33 new berths for containers by 2011 to make it a center for transshipment cargo in Northeast Asia (making it the one of the 10 largest container terminals in the world). It will have a large expanse of land as support areas in east and west, POSCO CTS terminal, and the Hwanggumsandan and the Songhwang support area complexes.
The Yulchon area (28.15 square km); Efforts will be made to attract high-tech new advanced material plants, industries related to steel production, metal assembly, precision chemicals related to the Yeosu Petrochemical Complex, and the Gwangyang Steel Mill, which will provide large amounts of cargo for Yeosu Airport and the more than 90 multi-purpose berths located within the bay.
The Sindok area (25.04 square km); The zone will be developed as a living support area for the GFEZ and it will encompass institutions and businesses in diverse sectors such as education, medicine, and residential, general business and leisure making it one the most a pleasant living environments in the peninsula. The area will also have a logistics complex for international consumer goods cluster (related to food production and marine products).
The Hwayang area (9.9 square km); The area will have tourism, business and leisure facilities including those for marine sports to make the area the best example for the national southern tourism belt plan. The area has magnificent sites and with the beautiful scenery of the Hallyo Marine National Park as its background is second to none in Northeast Asia.
The Hadong area (12.56 square km); The area will invite steel production, and vessel related industries that can complement the production capabilities of the Gwangyang Steel Complex. The area will also have an adjacent support area to handle residential, business and leisure needs.
(Stages of Development Plan):
--The first stage (2003-2010): Development Promotion Stage.
Logistics and production functions that will lead the proper development of GFEZ will be attracted and all support infrastructures will be completed.
The second stage (2011-2015): The Development Settling Stage. In consideration of the demands of local companies and residential structures, additional logistics, distribution and production facilities will be introduced to the zone, along with measures to increase foreign investment.
The third stage (2016-2020): Northeast Asia Base and Internationalization Completion Stage. All municipal installations will be completed the attraction of international-level businesses will be well on its way. By this stage a pleasant living environment would already have taken shape within the zone as many of the residents of GFEZ will bring to the area large numbers of employees.
The GFEZ Authority has achieved a lot,
although it is only 2 years and seven months old. At the present time, Ilsang Co., a developer of the Hwayang area pledged to invest $1.5 billion, part of $2.640 billion committed by 15 companies by signing MOUs and if those under negotiations are included the amount pledged for investment in the zone would come to $3.414 billion (47 possible additional investors).
Since the opening of the authority, the promotional plan has been established as well as the designation of the Yulchon district as a free economic zone (34 square km), approved the launch of the Hwayang tourism area development plan, drew up the Sindae area implementation plan, established the landscape management plan, promoted the road network implementation plan and secured the promoter of the project guidance plan.
At the same time, the authority conducted several nationwide briefing tours to raise the awareness for the Gwangyang harbor in order to secure cargo and paid calls on individual companies in a joint marketing effort with related organizations. The results of these efforts generated a 30 percent increase of cargoes for Gwangyang Harbor.
The number of voyages departing from Gwangyang harbor increased to 51 from 72 due to the diligent work of the employees of GFEZ including a new route linking Gwangyang and Osaka in Japan.
In order to develop the Yulchon industrial complex as speedily as possible, the authority cancelled its agreement with Hyundai Motor Company at the end of last year and the South Jeolla Province administration has decided to take over the project, issuing local bonds in order to acquire the necessary funds. The project is expected to have no trouble as many companies have shown interest in moving to the complex.
Major projects under promotion include the formation of a logistics and processing plant complex for international marine products in the Gwangyang Sepoong area encompassing some 530,000 pyeong at the cost of $1 billion;
the establishment of an annex of a Dutch marine logistics university; and the construction of a tank terminal as a joint venture with V Co. of the Netherlands; a nickel refinery by POSCO at the cost of $350 million will be constructed in the Gwangyang area and a magnesium plant in the Haeryong industrial complex in Sunchon at the cost of $35 million has started construction.
The CSP Co. of the United States moved into the Yulchon free trade area, and its nearby neighbors include the Jeonnam Techno Park, the Production Technology Research Center, and the high-tech bio-diesel complex. In the very near future plants in the shipbuilding, new advanced materials, and surface treatment companies are expected to start construction of their facilities. The authority has been building up a business support system in a broad, synergetic, and comprehensive manner.
The zone's authority has also hired the services of experts in 12 sectors including legal matters, investment, and construction administration and project assistance to speed up the attraction of domestic and international investment for the projects set up as targets for the GFEZ.
While promoting investment in the zone, the authority felt that despite the many advantages that GFEZ has to offer, the zone has a lack of recognition or branding power and thus is not as well known as other developments in China and Japan. For example, even though the FEZs in Incheon and Busan are more recognizable their costs and barriers make them less attractive for companies searching for the best place to locate their business. Even knowing that this is the case, some companies prefer to look at Seoul and Busan areas first rather than consider Gwangyang as their first choice.
But, the GFEZ is endowed with various natural and business conditions that could make it the best destination harbor in the world. As mentioned before, the Gwangyang Steel and the Yeosu Chemical Complexes have been generating profits for more than 30 years and once the rest of the industrial belt is finished the world will take notice of such an impressive, cost effective and comprehensive location. The area is located by the sea, with inexpensive land prices and an abundant qualified workforce. Moreover, The development only needs the expansion of its good social overhead capital in order to have all the necessary ingredients that leading companies are searching for when it comes to locating their production or logistics bases. The brand new Yeosu airport for example, in the very near future will have the capacity to handle large amounts of passengers and cargo (current runway is 2.1 kilometers long).
The investment target for this year is set at $600 million USD and $20 billion by 2020, with a cargo volume target for this year of 2.1 million TEU (9.33 by 2020).
The GFEZ authority plans to hold a series of in-country and abroad investment briefings and seminars, along visits to individual companies in order to solicit investment for the zone. It also plans to develop a business model based on the zone's geographical advantages to attract diversified logistics companies handling cargo from China and Japan.
In the area of development, the Gwangyang area is scheduled to complete the construction of a container wharf for four container ships berths in three stages by the end of this year. The new additions would mean that up to 16 container ships weighing 50,000 G/T (Super Pox-panamax) will be able to dock at the berths at the same time. Also, as part of the overall plan the construction of the 17 story marine center building as well as the joint logistics center in back of the harbor are almost nearing completion.
The Yulchon area will be the spearhead of the project as its site is almost ready and the plans for the free trade area are well on their way. Within this district, the completion of waste water storage, waste water treatment facility, and infrastructure in the area including roads are nearing completion.
The Sindok area will work on obtaining the approval on its implementation for its industrial complex, the establishment of the Haeryong industrial complex, the invitation for small-and-medium companies to move in, the establishment of multiple logistics complex and the construction of major roads linking all the complexes in the area.
The Hwayang area will start the work involving the purchase of land to begin the construction of facilities in the area including the planning for a third approach road and the paying reimbursement schedule for appropriating land from local residents. It will select the developer for the area as soon as the direction for the development plan is completed.
In order to speed up the development of the GFEZ, the improvement of its accessibility to the capital area including social overhead capital infrastructure projects are needed. With this in mind there will be more plans created to build a number of highways linking Mokpo and Gwangyang, Jeonju and Gwangyang and roads leading to the Yeosu industrial complex. The authority will also promote the plan to expand Yeosu airport, the construction of another track to make the Jeolla Railroad a double track line and the early construction of basic infrastructure for the Yulchon industrial complex. Most of all, the authority will do its best to secure funds from the national treasury to finance these and other relevant projects.
When the GFEZ is completed as planned, the Gwangyang Container harbor would rank as one of the 10 largest container ports in the world, with super-sized container vessels making calls at the harbor making the harbor a logistics hub in Northeast Asia. In the back of the harbor, many international logistics companies and harbor-related companies will take advantage of this great port.
The Yulchon and Hadong industrial parks will have companies move in that will generate synergy with the Gwangyang steel complex and the Yeosu National Petrochemical Complex and upgrade their international competitive advantages a great deal.
The Hwayang area is likely to attract some 3.1 million domestic and international tourists with its superb tourism and leisure facilities, as one of the most fun all-purpose resort areas anywhere.
The Sindae area will have schools, hospitals and leisure facilities for foreigners to create the perfect living environment conducive to a great quality of life.
All of these projects when completed by 2020 will service close to 1.2 million residents, create 85,000 jobs and 113 trillion won in production, with 44 trillion won worth of value-added work. The zone will be the leader of economic growth for the South Jeolla Province, boosting earnings for the province's residents and their quality of life as well. GFEZ will become a top logistics, new advanced industry and tourism hub, truly an international city both in style and substance making it the place to be in Northeast Asia. nw

By Commissioner Baek Ok-in
Gwangyang Bay Area
Free Economic Zone Authority

(clockwise)A view of the container pier of Gwangyang harbor. Another view of the container dock at Gwangyang harbor. A view of container yard in Gwangyang harbor.

(clockwise) Senior Consultants Forum held at the office of the GFEZ Authority. A ground-breaking ceremony held at the GFEZ. A view of the meeting for executives of large domestic firms invited to the GFEZ to have a look around at the container pier.