Busan Port Authority to establish logistics base in Indonesia

Busan Port Authority to establish logistics base in Indonesia

The Busan Port Authority (BPA) will establish and operate a bonded warehouse after it bought a new logistics base in Indonesia as part of its New Southern Policy to increase trade.

The BPA said it will take over the warehouse at the Probolinggo Port in East Java to expand the logistics chain between Busan and Indonesia and support cross-border trade.

East Java is the second largest economic area in Indonesia after Jakarta and is a hub of Korean business.

It will be designed to ease congestion at the nearby Surabaya Port and meet growing demand for warehouse capacity at Probolinggo Port.

BPA said it is planning to establish a joint enterprise in February  with a local logistics company PK and the Korea Overseas Infrastructure & Urban Development (KIND) Corporation and finish the warehouse construction and begin its sales activities in earnest from December.

The joint corporate participated by BPA will handle inland shipping and port unloading and will expand its business scope to include refer warehouse, new port development and operation, etc.

PK, established in 1991, is at the top ten maritime and logistics industry ranking and was the first Indonesian logistics company to take base in the Probolinggo Port.

KIND is a public agency under the Ministry of Land, Infrastructure, and Transportation established in 2018 to support Korean companies to enter into overseas markets.

Indonesia, one of the top 10 trading partners of Busan Port, has the 4th largest population in the world (270 million people) and is growing at the annual rate of 5%.

On Dec 18, the government concluded the CEPA with Indonesia for the first time as an ASEAN country following the government announcement of the New Northern Policy in 2017. This is expected to result in more bilateral trade activities and increased entry of Korean companies in the area.

Moreover, BPA is expected to complete the construction of BPA-Rotterdam Distribution Center by the end of next year and is working with the Port of Barcelona to operate a distribution center there from September next year.

The Authority is discussing with relevant entities to operate a distribution facility in India, Thailand, Vietnam, etc. as well and actual results is expected to be out next year.

BPA CEO NAM Ki-chan said, “It is meaningful that BPA secured a distribution base in Indonesia despite the prolonged US-China trade war and the COVID-19 situation. BPA will proactively expand Busan’s logistics network with ports overseas.”

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