Busan Port is ready to be your sincere

Busan Port, platform to expand your business

Contents

Busan in Korea 1

Busan Port in 2011 2

3

Busan Port, the optimal platform for your business 4

Current Developments at Busan Port

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 power-

World 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

10,000.00

15,000.00

20,000.00

25,000.00

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

GDP

Portrait of KOREA –Economic relation-

Location of Busan in Korea

Northeast Asia accounts for

27% of Global GDP and

25% of World Population

Vladivostok

Harbin Changchun

Shenyang

Dalian

Beijing

Tangshan

Tianjin

Qingdao

Tokyo

Nagoya Osaka

Fukuoka

Shanghai Nanjing

Hangzhou

Suzhou

Xiamen

Taipei Shenzhen

Hong Kong

Guangzhou

Taiyuan

Xi’an

Chengdu

Chongqing

Wuhan

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

Busan

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

Busan in Korea 1

Current Status of Busan Port 2

3

Busan Port, the optimal platform for your business 4

Current Developments at Busan Port

Busan Port

North Port

25 ㎞

New Port

Busan North Port

5 terminal Operators (20 berths)

North Port

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

13,453

11,980

14,194

16,185

13,261

8,8327,836

6,5697,6387,444 7,3536,2765,811 5,808 5,372

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

'07 '08 '09 '10 '11

Total Local T/S

1.4%

-10.9%

10.2% 18.5%

(Unit : ‘000TEU)

14.0%

(17.1%)

(11.6%) (-0.1%) (-7.5%)

(16.8%)

Local Volume at Busan Port

682

733713

753

700

701

760

724

759

566

549

659

662

691 679676

676

669

675

675702 681

618

791

760

500

550

600

650

700

750

800

'10.

1 3 5 7 9 11

'11.

1 3 5 7 9 11

'12.

1

2010. 1 2012. 1

(Unit : ‘000TEU)

17

2011. 1

668

651

648

647610

660

676

623

645

490

460

599604

468

544

532

536565

540

553550

501 495

523526

350

400

450

500

550

600

650

700

750

'10. 1 3 5 7 9 1

1

'11.1 3 5 7 9 1

1

'12.1

T/S Volume at Busan Port

18

2012. 1

2010. 1

2011. 1

(Unit : ‘000TEU)

Domestic market share

“ Korea’s total t/put in 2011 : 21.5million TEU(11.3% increase)”

(Unit : ‘000TEU)

Pyeongtaek 2.3%

others 2.3%

Ulsan 1.5%

Gwangyang 9.6%

Incheon 9.2%

Busan

75.1%

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

(14 .0% Increase)

(-1.1 % Increase)

(4.4 % Increase)

(-3.6 % Increase)

(16.9 % Increase)

Busan Port t/put by nation 2011

20

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%

(Unit : ‘000TEU)

Busan Port t/put with CHINA

21

(Unit : ‘000TEU)

1,000,000

1,150,000

1,300,000

1,450,000

1,600,000

1,750,000

1,900,000

2,050,000

2,200,000

2,350,000

2005 2006 2007 2008 2009 2010 2011

LOCAL T/S

Busan Port t/put with JAPAN

22

(Unit : ‘000TEU)

500,000

600,000

700,000

800,000

900,000

1,000,000

1,100,000

1,200,000

1,300,000

1,400,000

1,500,000

2005 2006 2007 2008 2009 2010 2011

LOCAL T/S

Busan Port t/put with U.S.A

23

(Unit : ‘000TEU)

500,000

600,000

700,000

800,000

900,000

1,000,000

1,100,000

1,200,000

1,300,000

1,400,000

1,500,000

2005 2006 2007 2008 2009 2010 2011

LOCAL T/S

Busan Port t/put with S.America

24

(Unit : ‘000TEU)

50,000

100,000

150,000

200,000

250,000

300,000

350,000

2005 2006 2007 2008 2009 2010 2011

MEXICO CHILE BRAZIL

World’s top 10 ports in 2011

25

(Unit : ‘000TEU)

11,90012,80014,400

13,020

31,50029,938

24,40422,570

16,17514,686

6.0%

11.3%

8.9%

13.4%

11.7%

14.0%

-0.1%

3.0%

5.3%

9.3%

0

5,000

10,000

15,000

20,000

25,000

30,000

Shan

ghai

Sing

apor

e

Hon

gkon

g

Shen

zhen

Busa

n

Nin

gbo

Gua

ngzh

ou

Qin

gdao

Duba

i

Rott

erda

m

0.0%

18.7%

T/Put Growth Rate

※ Rotterdam & Dubai Data are estimate

“ Busan Port recorded the highest growth rate”

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

Strengths of Busan Port

26

Transshipment Hub Port

2. Sophisticated Feeder Network

1. Perfect Geographical Location

3. Excellent Connectivity

5. Weather Condition

6. T/S Cargo Base

4. Deep Water

1. Geographical Location

Eastern Gateway to Russia

Logistics Hub

Largest Manufacturing Base

2nd Largest Economy

Located on the main trunk route

More than 500 ports in 100 countries

Huge market (Within 3hr Flight)

- 35% of World’s Container Vol.

- 25% of World Population

2. Feeder Network

◈ Japan : 60 ports

◈ China : 45 ports

◈ Russia : 5 ports

Sophisticated Feeder

Network

Network

U.S

Europe

1D

1.5D

1.5D 9D

25 D

2D

2D

3. Excellent Connectivity

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

(As of Aug, 2011)

Region Service Share

(%) 2010 2011 Increase

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

4. Deep Water

85

218191

145

226 231

0

50

100

150

200

250

300

2011 2012 2013 2014 2015 2016

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

Container vessels are growing in size, particularly more than 10,000 TEU vessels in shipping industry

※ Source 1. Drewry Shipping Consultants, 2011

2. CI Online 2011. 11

4. Deep water

13,800 TEU Vessels from MSC 14,400 TEU Vessels from CMA

14,100 TEU Vessels from CSCL 13,500 TEU Vessels from UASC

Water depth 15 ~ 16 m (17m by 2016)

Little tidal difference (1.3m)

5. Favorable weather conditions

“Best Transshipment Port”

For On Time Delivery for the carriers’ customers

Major carriers dropped T/S cargo at Busan Port during particularly

foggy spring season in 2011. Busan Port saw rapid increase

of T/S cargo during that season.

Minimal Typhoon Impact and Sea Fog

Busan Port in 2011

Even Better Weather Conditions

6. T/S cargo base

Europe

America

Cost reduction &

efficiency improvement

T/S Base

Contents

Busan in Korea 1

Current Status of Busan Port 2

3

Busan Port, the optimal platform for your business 4

Current Developments at Busan Port

Current Developments

1

Busan New Port Construction

2

Huge Space of Distripark at

Busan New Port

3

Busan North Port

Redevelopment

Busan New Port Construction

2.0km

1.15km

HPNT

4BERTHS

1.1km

HJNC

4 BERTHS

Connecting

Pier

Multi Purpose

TML

1.2km

700m

PNC

6 BERTHS

PSA

3 BERTHS Phase 2-3(BNCT)

4 BERTHS(2012)

Phase 2-4

3 Berths (TBD) 1.4km

1.05km

Phase 2-5 2 Berths (TBD) Phase 2-6

3 Berths (TBD)

0.7km 1.05km

Busan New Port Expansion

Feeder TML

Grain TML

Feeder TML

Container TML

Feeder TML

Multi TML

Ro-Ro TML

General Pier

“ The Korean government released the 3rd National Port Development

plan to construct additional 15berths at Busan New Port.”

Distripark Development

3.57M ㎡, 2011~2020

1.2M ㎡, 2005~2010

1.42M ㎡, 2011~2015

Distripark Development

Development Period :

2005~2010 Size : 1,204,000㎡ Already selected tenant companies

-Total of 30 Consortiums (Domestic : 48, Overseas : 47)

Northern Logistics

Park

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

Packaging Assembling

Storage Stevedoring

Applicable Business Tax incentives & benefits

Lease Terms and Conditions

- Lease Period : Max. 50 Years

- Lease Fee : 4~15 cents/㎡/month

(Logistics Companies)

Direct Tax

- 100 % Exemption for first 3 Years

- 50 % Exemption for next 2 years

Indirect Tax

- 100% Exemption

- Zero VAT

* USD

Northern Distripark

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

Tenants at Northern Distripark

Phase

Consortiums No.

Companies Size(㎡)

Cargo creation

(TEU)

Opening

Domestic overseas

1 2 2 4 51,879 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 1-3 (660,000 ㎡)

Phase 1-2 (811,000 ㎡)

Phase 1-1 (1,015,000 ㎡)

Phase 2 (1,093,000 ㎡)

Phase 1-1 (16 consortiums)

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

◈ Size : 1,511,450 ㎡

◈ Total Budget : US$ 8.5 billion

◈ From 2009 ~ 2019

(Infrastructure + Superstructure)

HBCT

DPCT Gamman

KBCT

UTC

Pier 1

Pier 2

Central Pier

Pier 3

Pier 4

Redevelopment Target Area

Container terminals will remain the same.

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

Busan in Korea 1

Current Status of Busan Port 2

3

Busan Port, the optimal platform for your business 4

Current Developments at Busan Port

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 ㎡)

11 13 16 Over 25 Tenants

660 812 1,014 2,486 Size(1,000㎡)

Phase 1-3 (2014)

Phase 1-2 (2013)

Phase 1-1 (2012)

Total Year

□ Development of phase 1

Phase 1-3 (660,215 ㎡)

Phase 1-2 (812,067 ㎡)

Phase 1-1 (1,014,358 ㎡)

Phase 2 (1,093,000 ㎡)

Opportunity in Western Distripark

Phase 1-1, 1-2 & 1-3

Land parcel plan

Logistics Area

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

Phase 1-3

Phase 1-1

Phase 1-2

□ Tenants Selection

ㅇ Size : 811,000 ㎡

ㅇ Selecting Companies : 13

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

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

Phase 1-2

Differential Rental Rate & Incentive by Foreign Investment Size

Rental Rate

Eligibility Rental Rates

(㎡/month)

Base Rent General Tenant Companies

(Including manufacturing companies)

$ 0.26

(KRW 281)

Rental

Preferences

Foreign Investment

from Foreign Multinational

Logistics Companies

Less than USD 1 Million $ 0.15

(KRW 168)

USD 1 Million ~ Less than USD 3 Million

$ 0.1 (KRW 106)

More than USD 3 Million $ 0.04

(KRW 43)

Rental Rates 1. Rental Preferences

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

(USD 1 = KRW 1,000)

Rental Rate

Foreign Investment Incentive for Rental Fee (㎡/month)

Discount More than USD 5 Million 50% discount

for 5 years

Incentives

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

Rental Rates 2 : Incentives for Rental Fee

(USD 1=KRW 1,100)

Tax benefits and incentives

Eligibility Benefits and Incentives

Corporate Tax Foreign Logistics Companies

injecting more than

USD 5 Million in the Distripark of Busan New Port

100% exemption for

the first 3 years

50% exemption for

the next 2 years Income Tax

Acquisition Tax

Foreign Logistics Companies,

invested in Distripark of

Busan New Port

100% exemption for

15 years Registration Tax

Property Tax

100% exemption for

the first 7 years

50% exemption for

the next 3 years

Tax Benefits and incentives

Platform to your business

Busan Distribution Center

USA

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