– The Ministry of Knowledge Economy has entered into an MOU with Gyeonggi Province and ProLogis.
– Gyeonggi Province participated in investor meetings to promote its investment environment during Korean President Lee’s official trip abroad, making it the first local government to undertake such a project with the new administration.
– With this investment, the province has laid the foundation for the development of Pyeongtaek Port as a global logistics port.

Gyeonggi Province participated in the National Investors Meeting hosted in New York during the new Korean president’s first US visit where it introduced potential American investors to the province’s investment environment. The province also entered into an MOU for the development of the Pyeongtaek Port Logistics Complex and inland logistics complexes with ProLogis, the world’s largest logistics facility developer.

The province held a signing ceremony for the MOU on investment and development of the Pyeongtaek Port Logistics Complex with ProLogis Chairman Jeffrey H. Schwartz at the New York Plaza Hotel at 15:10 (EDT) on April 16. Gyeonggi Governor Kim Moon-soo and Minister Lee Yun-ho of the Ministry of Knowledge Economy both attended the ceremony.

At the signing ceremony, the Chairman of ProLogis spoke of the importance of Pyeongtaek Port as an area with enormous growth potential, and highlighted the geographical advantages of the port as the closest port to Qingdao, Tianjin, and Shanghai (China), the expected increase in traffic as a result of the growth of Northeast Asian economic bloc fueled by the rapid growth of the Chinese economy and the activation of exchanges between North and South Korea, and its proximity to the vast consumer market of the Seoul Metropolitan area.

ProLogis also unveiled its plan to build a world-class logistics complex by investing USD 0.5 billion (FDI: USD 0.3 billion) in a port logistics facility on a portion of the land of the inner harbor, and making an additional investment of USD 0.5 billion (FDI: USD 0.3 billion) in other logistics facilities located in Hwado-eup, Namyangju, and Poseung-eup, of Pyeongtaek City.

Spanning an area of up to 792,000, the logistics facility will be built on the grounds of the Logistics Complex (area: 1,428,000) located at Pyeongtaek Port. As the facility will accommodate a low-temperature logistics center, normal-temperature logistics center, a third-party logistics gathering and delivery center, steel logistics center, and storage space for exported and imported vehicles and containers, this ultra-large port logistics facility is expected to drive the rapid growth of Pyeongtaek Port. Furthermore, as ProLogis will offer long-term logistics facility rental services to global logistics firms such as DHL, the port is expected to grow into a logistics hub.

The successful attraction of investment in the Pyeongtaek Port Logistics Complex will be recorded as one of the leading achievements of the province, following investments totaling USD 1 billion in the Ojeong area of Bucheon City and the logistics complex in Wongok-myeon, of Anseong City, which were agreed upon this past December.

Notably, this investment is recognized as the first large-scale investment to be attracted jointly by the new central government administration, which is striving to improve institutions for businesses, and a local government. Prior to ProLogis’ investment decision, the Ministry of Knowledge Economy, the Ministry of Land, Transport, and Maritime Affairs, and Gyeonggi Province actively worked for the early resolution of issues in the Bucheon and Anseong logistics centers. The issues included the early lifting of G/B in the Bucheon Logistics Complex and logistics volume allocation for the building of the Anseong Logistics Complex.

ProLogis is a leading global logistics infrastructure provider and operates 2,766 logistics facilities in 118 locations in 20 countries. In Asia, it has developed large-scale logistics facilities in Tokyo and Yokohama (Japan), as well as on the east coast of China. It plans to build an advanced, large-scale logistics port facility by applying the building techniques it developed in Suzhou and Lingang (China) to the Pyeongtaek Port Complex. After completing the complex, it plans to attract renowned global logistics firms, including DHL, Panasonic, FedEx, and UPS, whose customers include large shippers.

Gyeonggi Governor Kim Moon-soo of said, “The investment decision of ProLogis proves that Pyeongtaek Port has a competitive advantage as a global port and domestic logistics hub. This investment will significantly contribute to the stimulation of Pyeongtaek Port, and I anticipate that it will also further enhance the competitiveness of the Korean logistics industry. Our third-party logistics industry, which has been outperformed by more advanced nations, will now start to grow, and many state-of-the-art logistics systems including Supply Chain Management (SCM) will be introduced.”

Gyeonggi Province plans to capitalize on the momentum generated by this agreement to develop Pyeongtaek Port into a Northeast Asian logistics hub. In order to accommodate global logistics facilities and foreign investment firms within the complex, the province will designate the Pyeongtaek Port Logistics Complex as a free economic zone by working in close cooperation with the Ministry of Land, Transport, and Maritime Affairs and the Ministry of Knowledge Economy, the government bodies in charge of port management and investment attraction. The province plans to attract further foreign investors like ProLogis, stimulate exports and imports, and expand global logistics.

Gyeonggi Province also plans to support a large-scale logistics facility construction project of ProLogis that will significantly reduce the logistics costs of businesses by systematically connecting the Metropolitan Multi-Floor Logistics Center in the Ojeong area of Bucheon City, a large inland logistics complex in Wongok-myeon, of Anseong City, and an ultra-large port logistics complex at Pyeongtaek Port. The province expects that the plan will not only complete the logistics network in the Seoul Metropolitan area that connects Incheon, Bucheon, and Seoul, as well as Pyeongtaek, Anseong, and Seoul, but also will position the province a Northeast Asian logistics hub connecting China and Japan by further improving its logistics competitiveness based on newly introduced advanced logistics technology.

The province also expects enormous financial benefits from the building and operation of the Pyeongtaek Port Logistics Complex, which will lead to the building of new commercial zones in adjacent areas. Anticipated financial benefits include KRW 1.5 trillion of production inducement and added value, and the creation of over 5,300 jobs on an annual basis.

The agreement made by the province is notable in that it is a large-scale investment that has been made through close cooperation between the central government and a local government to activate the service industry. Though this type of investment will have enormous ripple effects in terms of the creation of jobs and added value, it has never been attempted before in foreign investment attraction due to various regulations and limitations. The agreement is also significant in that the portion of direct investment out of the total invested amount is more than 60% (USD 0.6 billion). It is expected to serve as a growth momentum for the third-party logistics industry in Korea, which has fallen behind that of advanced nations.

Chairman Jeffrey H. Schwartz arrived at the signing ceremony on a chartered plane and commented, “This investment decision can be attributed to Gyeonggi Province’s prompt response to the issues of the Bucheon and Anseong logistics complexes, and this has boosted our confidence in the province. We plan to build leading-edge logistics facilities which meet the global standards at Pyeongtaek Port in Gyeonggi Province, which is emerging as a logistics hub of Asia.”