Eye for Huge Logistics Hub of N.E. Asia

Gwangyang Bay Area Free Economic Zone will continue to attract both domestic and foreign firms to invest in the zone

The Gwangyang Bay Area Free Economic Zone Authority (GFEZA) Commissioner Choi Jong-man boasted that the biggest advantage the GFEZ has going is Gwangyang Bay and its vicinity, which includes Gwangyang Harbor and POSCO’s Gwangyang steel complex. The area is being developed with an eye to become a maritime logistics hub of Northeast Asia, which is projected to be one of the largest markets in the world with China’s rapid development.
GFEZ has already chipped in a lot towards national economic growth by attracting many firms to invest in the zone and creating jobs for the local communities since its establishment in 2003 and it is expected to do more for the country when it is fully developed under the plan pushed by the GFEZA, the commissioner said. Following are excerpts of what Commissioner Choi had to say in this recent written interview with NewsWorld on the zone’s future shape and its economic contribution when its development plan is completed:
Question: What are the special characteristics of your FEZ?
Answer: It is located close to China, which has been growing as the largest market in Northeast Asia. It’s equipped with the appropriate conditions to become a logistics and trade hub in the region and was designated on Oct. 30, 2003 as a free economic zone to develop the Gwangyang Bay and its vicinity into a maritime logistics hub of Northeast Asia. The Gwangyang Bay Area Free Economic Zone Authority was established on March 24, 2004.
The GFEZ encompasses a total of 92.73 square km, including a vast area extending from Yeosu, Suncheon, Gwangyang and Hadong County, South Gyeongsang Province. The area is to be developed in three stages through 2020 at a cost of 15.7 trillion won to house such industries as manufacturing, logistics, residential housing, education, tourism and leisure facilities divided into five districts ― Gwangyang, Yulchon, Sindeok, Hwayang and Hadong ― where 22 complexes will be built. When the project is completed, the zone will generate 164 trillion won worth of products, 66 trillion won in added-value and a backyard with 1.2 million people working.
The most outstanding feature of the zone is Gwangyang Harbor, which ranks 13th in the world in terms of cargo handling. It has national and regional industrial complexes nearby with a total space of 189 square km, a lot of room for the creation of synergy. The GFEZ is second only to Gyeonggi Province as far as the size of the area is concerned, taking up 14.7 percent of all available land in Korea, 10 times larger than Incheon, and seven times larger than Busan, consisting of 77 percent of the land in South Jeolla Province.
Also located in the nearby area are POSCO’s Gwangyang Steel Mill and the Yeosu Industrial Complex, which turns out 56 percent of all petrochemical products in Korea, which have been a great help for attracting industrial plants into the region. Other advantages of the zone are the Yeosu International Expo in 2012 and the 2013 Suncheon International Garden Expo, in addition to the Gwangyang Steel Plant’s additional steel output facilities of up to 2 million tons annually from this year, which will boost the publicity for the GFEZ and Gwangyang Harbor, a great help for attracting foreign businesses to set up plants there.
Q: Can you please update us on the progress of the strategies of GFEZ to entice investments and the results so far?
A: So far, GFEZ has attracted $7.3 billion from investors both at home and abroad, creating 20,000 jobs in the seven years of GFEZ’s operation. Foreign investments came to $2.6 billion from 33 investors including the SNNC from French New Caledonia and Meya Yulchon Power Co. from Hong Kong.
In the first stage of the GFEZ development project, 12 of the 22 industrial lots in the free economic zone have been developed, including the first stage of the backyard of the container wharf of Gwangyang Harbor and the POSCO terminal CTS.
The development of the Yulchon No. 1 Industrial Complex and 10 other lots are being undertaken and the Yulchon No. 2 Industrial Complex and 10 other lots are up for development from 2011 in two or three stages.
Hyundai Motor gave up its rights to develop the Yulchon No. 1 Industrial Complex. GFEZA had to take over the project in 2006 and has been able to attract 58 firms to set up plants in the complex. Of them, 33 have been operating the plants, while 25 others are in the middle of either building their plants or plan to start building the plants as soon as possible.
The Ministry of Knowledge Economy selected GFEZA as the second best free economic zone authority in its evaluation of the four FEZ authorities in the country, which include Incheon, Busan and Jinhae, and received 120 million won in management funding support. We received such a high rating due to our strategies to attract investments centered around harbor, steel and other major industries to build industrial plants around the harbor, taking various measures to solve problems for the firms operating plants inside the zone and its special support systems for attracting investors.
Q: What are some of the major tasks for your management of the GFEZ?
A: We at GFEZA are trying to expand the idle lots in the GFEZ. All of the industrial complexes inside the zone have a high rate of occupancy, led by the Yulchon No. 1 Industrial Complex, currently at 82 percent, and forecast to be filled by the end of this year.
We will do our best to expand the FEZ by developing background areas of Gwangyang Harbor to the east and west and the Sidae and Haryeong districts. The development plans for the Gwangyang and Sepung general industrial complexes and the Yulchon No. 2 Industrial Complex and the Hwangkeum Industrial Complex will be moved up to earlier than planned. GFEZ has been trying to attract $1.3 billion of investments this year and 2 million TEUs of cargo for Gwangyang Harbor. As of Sept. 30, some $400 million in investments including those by SPP Heavy Industry have been secured, creating some 2,000 jobs in the zone, and targets will be achieved by the end of this year, as large projects are being discussed for their location in the zone.
The Gwangyang and Sepung General Industrial Complex is up for completion in 2015 with a total investment of 360.6 billion won to prepare the 2.38 square km area for various industrial plants. In August, agreements were signed with four firms including KCC Construction on priority rights for consultations and the formation of a special purpose company to join as a builder of the complex. Industries up for entering the complex include metal, metal assembly, IT and foods.
Yulchon No. 2 Industrial Complex will be located in Janghung-dong, Yulchon County in Yeosu, South Jeolla Province, with a total space of 8.9 square km including 3.8 square km for the industrial zone and the background areas of the harbor and 5.1 square km for others. Some 1.167 trillion won will be invested including 858.9 billion won for the industrial complex and 307.8 billion won for harbor backyards for infrastructure, slated for completion by 2020. The Ministry of Land, Transport and Maritime Affairs and the GFEZ will be jointly in charge of the project, along with a number of private investors.
On Sep. 9, Hyundai and Daewoo construction companies signed an MOU to be included in the special purpose company to take charge of construction of the project.
The project to build the complex will hopefully be kicked off as early as 2012 after finishing various paperwork including the approval of the revision of the original development plan and the environmental evaluation. The industries to be attracted to the complex will include labor-intensive and high value-added ones such as electric-electronic, non-ferrous metal manufacturing, transportation equipment, precision medical equipment and others. The complex will have access roads to the Yeosu National Industrial Complex, and the backyards of Gwangyang Harbor.
Hwangkeum Industrial Complex, to be located in Hwangkeum-dong, Gwangyang City, will have a total space of 1.2 square km and will be up for construction by 2015 with an investment of 265.9 billion won. The area close to the sea totaling 1.26 square km in area will be up for construction in consultations with Gwangyang City. Builders to take charge of the project will have been selected by Nov. 8.
A special purpose company (SPC) will be set up after selecting builders for the project. They will sign an MOU to take charge of the construction of the complex, which will house such industries as metal assembly, electric-electronics and manufacturers that can create cargoes for container shippers, transport, R&D and others. The Hwasong Industrial Complex’s Galsa Bay Shipbuilding Complex, which was launched on Feb. 23 and is slated for completion in 2012, is 5.61 square km in area and will be built with an investment of 1.59 trillion won. In September, Daewoo Shipbuilding and two other companies signed agreements to take over 1.55 square km of land in the complex.
Daesong Industrial Complex, with 1.37 square km of space, will begin construction within this year with an investment of 37.4 billion won to house such industries as primary metal assembly and assembly and shipbuilding materials manufacturers.
Q: Little investment has been attracted into the free economic zones around the country. What are your plans to continue to lure investments into the Gwangyang FEZ?
A: We plan to attract investments into the FEZ with plans tailor-made to suit the needs of each candidate investor. We will designate a project manager to handle various matters from consultations to the final steps to enter the FEZ. We have been focusing on attracting foreign investments by first building various service facilities in the zone including education and medical, which are prerequisites for foreign investors, with special attention paid to securing offshore and R&D facilities, which are likely to be concluded successfully. nw

A scene from Gwangyang Harbor cargo wharf. Commissioner Choi Jong-man of the Gwangyang Bay Area Free Economic Zone Authority