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Korea's second largest container terminal woos investors from UAE

"We have spoken to Dubai Port (DP) World this morning," confirmed the head of the International Logistics Business Team at KCTA, Jongjin Kil and said they were hoping DP World, would invest in the port.

DP World is already a joint lead sponsor and investor in the country's largest container terminal, Pusan Newport Co (PNC) along with Samsung Corporation and the Korean government. DP World has been contracted as the operations and maintenance provider to PNC while KCTA operates the port.

KCTA will also be inviting commercial shipping companies, developers, consultants and all other interested parties to the port of Gwangyang to see the state-of-the-art facilities, said Kil. Being only seven years (PNC is over 100 years old) it has not yet developed any significant ties with the Middle East. So far only one company from Iran is using the port as its main hub for North East Asia, said Kil.

The delegation, which also includes officials from the Ministry of Maritime Affairs and Fisheries (MOMAF), intends to change this. The aim is to turn Gwangwang Port into an international logistics and distribution hub that will rival PNC in North East Asia. The aim, however, is for the two ports to complement one another as well as to compete, said Kil.

Gwangyang Port has 12 berths, eight having a 50,000 ton capacity and four having a 20,000 ton capacity. The port also has a capacity to cater for a vessel handling 10,000 TEUs.

Another seven berths with a 50,000 capacity are also under construction, four of which will be completed at the end of the year and the remainder by 2008. When this expansion is completed the Gwangyang port will be able to handle 10 million TEUs with a total 33 berths. Two logistics parks, called GP Distriparks, are also being built adjacent to the port. And a highly sophisticated automated distribution system will be ready by June 2007.

Addressing a luncheon seminar to introduce Gwangwang Port — the first time such an exercise has been undertaken in the Middle East — the president of KCTA said it made a great deal of sense for the port to become a logistics hub in North East Asia and to work with Dubai to effect this, given that Dubai is recognised as a gateway in the Middle East to connect Africa, Europe and Asia. He also said the authority was offering various incentives for shipping liners, shippers and forwarders to do business in the port, including using a mileage system and offering competitive lease rates.

Kil also emphasised the cost savings that a company could make by using Gwangyang as its central distribution centre in North East Asia. According to KCTA's calculations, "Hongkong is almost four times as expensive as Gwangyang , and Kobe and Tokyo is three times as expensive," said Kil. "If Gwangwang is weighted as 100, Hongkong is 385, Kobe 289, Tokyo 296, Shanghai 170, Kaoshiung 167, Singapore 205, and Qindao 166."

At the seminar, general director of the Port Bureau, MOMAF, Byeong-Goo Yoon, also spoke about the increasing ties between Korea and the UAE in the area of trade as well as investment and why it made sense to foster these ties.

"Our intention is to present you with our plans to promote the value and interests involved in Korea's ports as key logistical hubs. But we also hope to exchange our plans for the future in drawing the relationship between Dubai and Korea closer together to build a powerful and mutually beneficial partnership," he said.

Last year Korea imported $10 billion of goods from the UAE, he said, of which oil comprised 18 per cent and gas, 15 per cent. Korea also exported $27 billion worth of goods to the UAE. Korean companies also have significant involvement in helping to build some of Dubai's iconic structures, such as the Burj Dubai. "This has come about through the involvement of one of our leading brands Samsung Corporation." And, he added, Hyundai Corporation has been closely involved in the construction of the Jebel Ali Power and desalination station project.