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Busan Port, platform to expand your business


Contents 1 2 3 4

Busan in Korea

Busan Port in 2011

Current Developments at Busan Port

Busan Port, the optimal platform for your business


Portrait of KOREA U.S. Secretary of the State Hillary Clinton stayed up late into the night to watch Kim Yuna’s Gold Medal Performance and said: “I think she greatly improved South Korea’s national image.” The United Nations General Assembly appoints Ban Ki-moon to second term as UN Secretary-General : Mr. Ban’s second term will run from 1 Jan, 2012 to 31 Dec, 2016


Portrait of KOREA– Korean Wave-


Portrait of KOREA– economic powerWorld No. 1 in Shipbuilding World No. 1 in Memory Semi-con World No. 2 Mobile Phones Producer World No. 1 TFT-LCD Producer World No. 5 Automotive Producer

World No. 6 Steel Producer World Top 10 Builders World No. 6 in Nuclear Power Production


Portrait of KOREA

–Economy-

Korea’s Per Capita Income GDP 25,000.00

20,000.00

15,000.00

10,000.00

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011


Portrait of KOREA

–Economic relation-


Location of Busan in Korea 60 cities with population over 1 million within 3.5 hours flight 26 int’l air routes in operation & new int’l airport to be constructed Harbin Changchun

Vladivostok

Shenyang

Beijing Tangshan

Dalian

Tianjin Taiyuan

Tokyo Qingdao

Busan

Xi’an

Osaka Fukuoka

Suzhou Nanjing

Chengdu Wuhan

Nagoya

Shanghai

Hangzhou

Chongqing

Xiamen Shenzhen Guangzhou Hong Kong

Taipei

Northeast Asia accounts for 27% of Global GDP and 25% of World Population


Demographic of Busan, Korea


Busan in Korea


Busan in Korea  South Korea‟s second largest city, with a population of 3.6 Million  The fifth busiest container port in the world  Named „Top 4 Asian International Conference City‟  Host to, among many others: 2011 International Association of Ports and Harbors Conference 2005 APEC Summit 2002 Asian Games Marine Week  Home to the Busan Port Redevelopment Project


Contents 1 2 3 4

Busan in Korea

Current Status of Busan Port

Current Developments at Busan Port

Busan Port, the optimal platform for your business


Busan Port

25 ㎞ North Port New Port


Busan North Port

North Port 5 terminal Operators (20 berths)


Busan New Port

Opening : 2006 22 berths, under operation Complete construction by 2019 Handling capacity : 15M TEU Water depth : 15 ~ 17m


Volume Trend of Busan Port (Unit : „000TEU)

Total

18,000 16,000

Local

1.4%

10.2%

13,453

16,185

14,194

-10.9%

11,980

12,000

7,836

10,000

6,000

T/S 18.5%

14,000 13,261

8,000

14.0%

7,444

7,638

(11.6%)

5,811

(-0.1%)

5,808

6,569 (-7.5%)

5,372

8,832

(17.1%)

7,353

(16.8%)

6,276

4,000 2,000 0 '07

'08

'09

'10

'11


Local Volume at Busan Port (Unit : ‘000TEU)

791

800 750 691 679

700

675

659

724

700

713

733

682

675

676

600

2012. 1

669

566

618 2011. 1

550

'1 2. 1

11

9

7

5

3

11

9

7

5

549

3

'1 0. 1

753

701

2010. 1

500

760

760

702 681

'1 1. 1

650

662

676

759

17


T/S Volume at Busan Port

750

(Unit : ‘000TEU)

700

676

645

650

660

604 599

565 553 550 536

600 550 460

500

450 490

532

540

648

651 610

623

668

526 544 523 2011. 1

647 2012. 1

501 495 468

2010. 1

400

2. 1 '1

11

9

7

5

3

11

9

7

5

3

1. 1 '1

'1

0. 1

350

18


Domestic market share “ Korea’s total t/put in 2011 : 21.5million TEU(11.3% increase)” (Unit : ‘000TEU)

Ulsan 1.5%

(-3.6 % Increase)

Pyeongtaek 2.3% (16.9 % Increase)

Gwangyang 9.6%

others 2.3%

(-1.1 % Increase)

Inc heon 9.2% (4.4 % Increase)

Busan 75.1% (14 .0% Increase)

※ Busan Share 2010 (73%) -> 2011 (75.1%)


Busan Port t/put by nation 2011 (Unit : ‘000TEU)

NATION

2010

2011

Growth Rate

Total

L/C

T/S

Total

L/C

T/S

Total

L/C

T/S

CHANA

3,297,464

1,494,328

1,803,136

3,924,053

1,628,851

2,295,202

19.0%

9.0%

27.2%

JAPAN

2,258,986

1,178,392

1,080,594

2,414,218

1,313,679

1,100,539

6.8%

11.4%

1.8%

U.S

2,117,579

1,108,962

1,008,617

2,319,231

1,179,547

1,139,684

9.5%

6.3%

12.9%

RUSSIA

443,997

232,744

211,253

529,742

290,019

239,723

19.3%

24.6%

13.4%

CANADA

334,077

143,699

190,378

361,248

149,955

211,293

8.1%

4.3%

10.9%

AUSTRALIA

308,156

174,370

133,786

359,401

209,357

150,044

16.6%

20.0%

12.1%

U.A.E

302,068

230,591

71,477

314,434

250,560

63,874

4.0%

8.6%

-10.6%

MEXICO

258,573

127,940

130,633

310,670

148,585

162,085

20.1%

16.1%

24.0%

INDIA

242,595

184,389

58,206

297,077

192,324

104,753

22.4%

4.3%

79.9%

VIRTNAM

286,822

183,593

103,229

293,978

200,459

93,519

2.4%

9.1%

-9.4%

INDONESIA

249,505

145,919

103,586

270,482

155,186

115,296

8.4%

6.3%

11.3%

GERMANY

233,683

178,755

54,928

269,278

207,369

61,909

15.2%

16.0%

12.7%

SINGAPORE

246,058

180,993

65,065

258,420

192,617

65,803

5.0%

6.4%

1.1%

HONGKONG

257,830

176,193

81,637

255,349

171,682

83,667

-0.9%

-2.5%

2.4%

THAILAND

213,478

113,089

100,389

237,834

122,693

115,141

11.4%

8.4%

14.6%

CHILE

169,987

87,186

82,801

234,815

115,777

119,038

38.1%

32.7%

43.7%

TAYPEI

211,770

134,164

77,606

224,645

146,273

78,372

6.0%

9.0%

0.9%

BRAZIL

138,719

95,634

43,085

206,776

137,445

69,331

49.0%

43.7%

60.9%

20


Busan Port t/put with CHINA (Unit : ‘000TEU)

LOCAL

T/S

2,350,000 2,200,000 2,050,000 1,900,000 1,750,000 1,600,000 1,450,000 1,300,000 1,150,000 1,000,000

2005

2006

2007

2008

2009

2010

2011 21


Busan Port t/put with JAPAN (Unit : ‘000TEU)

LOCAL

T/S

1,500,000 1,400,000 1,300,000 1,200,000 1,100,000 1,000,000 900,000 800,000 700,000 600,000 500,000

2005

2006

2007

2008

2009

2010

2011 22


Busan Port t/put with U.S.A (Unit : ‘000TEU)

LOCAL

T/S

1,500,000 1,400,000 1,300,000 1,200,000 1,100,000 1,000,000 900,000 800,000 700,000 600,000 500,000

2005

2006

2007

2008

2009

2010

2011 23


Busan Port t/put with S.America (Unit : ‘000TEU)

MEXICO

350,000

CHILE

BRAZIL

300,000 250,000 200,000 150,000 100,000 50,000

2005

2006

2007

2008

2009

2010

2011 24


World’s top 10 ports in 2011 (Unit : ‘000TEU)

“ Busan Port recorded the highest growth rate” T/Put

31,500 30,000 29,938 25,000

18.7%

24,40422,570 14.0%

13.4%

11.3%

11.7%

20,000 15,000

Growth Rate

16,17514,686 14,400 8.9% 13,020 12,80011,900

9.3% 5.3%

10,000

6.0%

3.0%

5,000

-0.1%

ai Ro tt er da m

Du b

o gd a Qi n

u gz ho

Gu an

ng bo Ni

ng a Si

Bu sa

po re

i gh a Sh an

※ Rotterdam & Dubai Data are estimate

n

0.0%

Ho ng ko ng Sh en zh en

0

Port of LA : 7,900,000 TEU Port of Long Beach : 6,061,000 TEU 25


Strengths of Busan Port 4. Deep Water

1. Perfect Geographical Location

2. Sophisticated Feeder Network

3. Excellent Connectivity

Transshipment Hub Port

5. Weather Condition

6. T/S Cargo Base

26


1. Geographical Location Eastern Gateway to Russia

Largest Manufacturing Base

Logistics Hub

Huge market

(Within 3hr Flight) - 35% of World’s Container Vol. - 25% of World Population

Located on the main trunk route More than 500 ports in 100 countries

2nd Largest Economy


2. Feeder Network Network Sophisticated Feeder Network U.S 9D

2D

1.5D

2D

1.5D 1D

◈ Japan : 60 ports 25 D Europe

◈ China : 45 ports ◈ Russia : 5 ports


3. Excellent Connectivity (As of Aug, 2011)

Service 2010

2011

Increase

Share (%)

Japan

63

70

7

19.0

Southeast Asia

72

72

0

19.6

China

51

45.5

△5.5

12.4

N. America

37

46

9

12.5

S. America

29

43

14

11.7

Europe

26

37

11

10.0

Russia

12

13.5

1.5

3.7

Middle East

15

13

△2

3.5

Australia

18

27

9

7.3

Others

0

1

1

0.3

Total

323

368

45

100

Region

※ Study by BPA to regular carriers handling more than 1,000 TEU at Busan Port (As of Jul, 2011)


4. Deep Water Container vessels are growing in size, particularly more than 10,000 TEU vessels in shipping industry

300

(Unit : No. of more than 10,000 TEU vessels)

단위 : 척

250

191

200

226

231

2014

2015

2016

145

150 100

218

85

50 0

2011

2012

2013

※ Source 1. Drewry Shipping Consultants, 2011 2. CI Online 2011. 11


4. Deep water  Water depth 15 ~ 16 m (17m by 2016)  Little tidal difference (1.3m) 13,800 TEU Vessels from MSC

14,400 TEU Vessels from CMA

14,100 TEU Vessels from CSCL

13,500 TEU Vessels from UASC


5. Favorable weather conditions “Best Transshipment Port”

Even Better Weather Conditions Minimal Typhoon Impact and Sea Fog

Busan Port in 2011 For On Time Delivery for the carriers’ customers

Major carriers dropped T/S cargo at Busan Port during particularly foggy spring season in 2011. of T/S cargo during that season.

Busan Port saw rapid increase


6. T/S cargo base Cost reduction & efficiency improvement

T/S Base Europe America


Contents 1 2 3 4

Busan in Korea

Current Status of Busan Port

Current Developments at Busan Port

Busan Port, the optimal platform for your business


Current Developments 1

2

3

Busan New Port Construction

Huge Space of Distripark at Busan New Port

Busan North Port Redevelopment


Busan New Port Construction Phase 2-5 Phase 2-6 2 Berths (TBD) 3 Berths (TBD)

0.7km 1.05km

HJNC 4 BERTHS

1.1km Phase 2-4

1.05km

PNC 6 BERTHS

3 Berths (TBD)

1.4km

2.0km

Phase 2-3(BNCT) 4 BERTHS(2012)

1.2km 1.15km HPNT 4BERTHS

700m Multi Purpose TML

PSA 3 BERTHS

Connecting Pier


Busan New Port Expansion “ The Korean government released the 3rd National Port Development plan to construct additional 15berths at Busan New Port.”

General Pier Ro-Ro TML

Container TML Feeder TML

Grain TML Multi TML Feeder TML Feeder TML


Distripark Development

3.57M ㎡, 2011~2020

1.2M ㎡, 2005~2010

1.42M ㎡, 2011~2015


Distripark Development

Northern Logistics Park

Development Period : 2005~2010 Size : 1,204,000㎡ Already selected tenant companies -Total of 30

Consortiums

(Domestic : 48, Overseas : 47)

Western Logistics Park

Development Period :2010~2020 Size : 3,579,000㎡ - Phase1-1 : 1.01M㎡ - Phase1-2 : 811K㎡ - Phase1-3 : 660K㎡ - Phase2 : 1.09M㎡ Already selected tenants at Phase 1-1 : 16 Consortiums

Southern Logistics Park

Development Period : 2012~2015 Specific Development Plan : TBD


Distripark Development Applicable Business Assembling

Tax incentives & benefits

Packaging

* USD

 Lease Terms and Conditions - Lease Period : Max. 50 Years - Lease Fee : 4~15 cents/㎡/month (Logistics Companies)

Storage

Stevedoring

 Direct Tax - 100 % Exemption for first 3 Years - 50 % Exemption for next 2 years  Indirect Tax - 100% Exemption - Zero VAT


Northern Distripark

At present, 26 companies are under operation & 4 companies will enter operation by May, 2012


Tenants at Northern Distripark Phas e 1

Consortiums No. 2

Companies Domestic 2

Size(㎡)

overseas 4

51,879

Cargo creation (TEU)

Opening

90,546

Under operation (‟06~‟07)

2

7

11

12

366,677

236,392

Under operation (‟08~09)

3

13

24

18

367,161

531,126

Under operation (‟09~‟11)

4

8

12

17

225,026

262,207

’10~’12

Total

30

49

51

1,010,743

1,120,271

-

Overseas companies : Japan(19), China(13), etc(15)


Western Distripark

(Phase 1-1)

Phase 2 (1,093,000 ㎡) Phase 1-3 (660,000 ㎡)

Phase 1-2 (811,000 ㎡)

Phase 1-1 (16 consortiums) Phase 1-1 (1,015,000 ㎡)


Marine Fuel Supply ▪ Location - Adjacent to the South Container Terminal ▪ Size - Size : 63,000㎡ - Facilities : Jetty, Tanks, pipeline, others ▪ Construction - Samsung C&T International

▪ Operation - Marine & Oil (Hanjin Shipping, Samsung Logistics, others)

▪ Plan - Implementation of environment impact assessment (3, 2012) - Embark on construction (4. 2012)

▪ Operation in 2015


Redevelopment on the old port Container terminals will remain the same. Redevelopment Target Area

HBCT UTC

Pier 4 Pier 3 Central Pier DPCT Pier 2

Gamman

Pier 1

KBCT

◈ Size : 1,511,450 ㎡ ◈ Total Budget : US$ 8.5 billion ◈ From 2009 ~ 2019 (Infrastructure + Superstructure)


Master plan of the Redevelopment

※’09.3월 항운노조 보상협상 완료

※’09.4월 상부시설 민간사업자 공모

※ Phase for Infrastructure Construction. Superstructure such as buildings will be completed by 2019.


Contents 1 2 3 4

Busan in Korea

Current Status of Busan Port

Current Developments at Busan Port

Busan Port, the optimal platform for your business


Busan Port, another opportunity for your business KORUS FTA

Increase of trade volume between two countries

Take advantage of Busan Port for your business

Busan Port, platform to expand your business. Why?


Opportunity in Western Distripark

Phase 2 (1,093,000㎡)

Phase 1 (2,486,000 ㎡)

□ Development of phase 1 Year

Total

Phase 1-1 (2012)

Phase 1-2 (2013)

Phase 1-3 (2014)

Size(1,000㎡)

2,486

1,014

812

660

Tenants

Over 25

16

13

11


Opportunity in Western Distripark Phase 1-1, 1-2 & 1-3 Phase 2

(1,093,000 ㎡)

Phase 1-3 (660,215 ㎡)

Phase 1-2 (812,067 ㎡)

Phase 1-1

(1,014,358 ㎡)


Land parcel plan

Phase 1-3

Logistics Area

Phase 1-2

Phase 1-1

Supporting Facilities

In case of the Phase 2, the detailed plans are yet to be decided.

At least 5,000 m2 up to 150,000 m2 of the land, available for Logistics & Manufacturing Companies at the phase 1-2 and 1-3 respectively. After suggestion of its business plan with its required land, BPA will coordinate and adjust the investors’ requirement for the land.


Phase 1-2 □ Tenants Selection ㅇ Size : 811,000 ㎡

ㅇ Selecting Companies : 13 ㅇ Eligibility - Logistics or Manufacturing Companies (at home and abroad)

Phase 1-2

ㅇ Tender Notice : March, 2012 ㅇ Submission & Selection : June 2012 * 60~90 days for proposal preparation

□ Lease term & condition ㅇ Lease Period : Max 30 Year + 20 years ㅇ Lease Fee : 4~28 cents/㎡/month

Differential Rental Rate & Incentive by Foreign Investment Size


Rental Rate Rental Rates 1. Rental Preferences (USD 1 = KRW 1,000)

Base Rent

Eligibility

Rental Rates (㎥/month)

General Tenant Companies (Including manufacturing companies)

$ 0.26 (KRW 281)

Less than USD 1 Million

Rental Preferences

Foreign Investment from Foreign Multinational Logistics Companies

$ 0.15

(KRW 168)

$ 0.1

USD 1 Million ~ Less than USD 3 Million

(KRW 106)

More than USD 3 Million

$ 0.04

(KRW 43)

” Logistics business of the multinational logistics companies should be stipulated on the laws of Free Trade Zone


Rental Rate Rental Rates 2 : Incentives for Rental Fee (USD 1=KRW 1,100)

Foreign Investment

Incentive for Rental Fee (㎥/month)

Discount

More than USD 5 Million

50% discount for

5 years

More than USD 10 Million

100% exemption for 5 years

More than USD 15 Million

100% exemption for 7 years

More than USD 30 Million

100% exemption for 10 years

More than USD 50 Million

100% exemption For 15 years

Incentives


Tax benefits and incentives Tax Benefits and incentives Eligibility Corporate Tax

Foreign Logistics Companies injecting more than

Income Tax

USD 5 Million in the Distripark of Busan New Port

Acquisition Tax Registration Tax

Property Tax

Foreign Logistics Companies, invested in Distripark of Busan New Port

Benefits and Incentives 100% exemption for the first 3 years 50% exemption for the next 2 years

100% exemption for 15 years 100% exemption for the first 7 years 50% exemption for the next 3 years


Platform to your business USA

Busan Distribution Center

Other countries


Benefits from your investment

Logistics Efficiency

Total Logistics Cost Reduction

Inventory reduction

Low Rental Rate


Explore the potential of Busan Port

Busan Port, success for your business


Busan Port Authority