The Ministry of Oceans and Fisheries of ROK(MOF) and the Busan Port Authority(BPA) announced that they secured a logistics center in the Port of Probolinggo, Indonesia, and started operation on September 15.

The MOF and BPA have been carrying out projects to secure logistics centers in major ports to support Korean companies doing business overseas. These projects aim to reduce excessive logistics costs incurred on Korean companies by using foreign logistics centers overseas.

The Port of Probolinggo is located in the northern East Java province, Indonesia’s second-largest economic area. Lower rent and labor costs in this area attracts many Korean companies, however, the pace of investment in logistics infrastructure is slow, which leads to Korean companies to have difficulties in using warehouses.

To address such issues, the MOF and BPA set out to secure a logistics center in the East Java area. First, they surveyed the ports throughout East Java and decided to replace the Port of Surabaya, the No.1 port in the East Java area with the Port of Probolinggo. Then, in May of this year, the BPA established a joint venture with local company to secure and operate a logistics center. The joint venture secured a logistics center with a total area of 25,000 square meters (12,000 square meters for warehouse and 13,000 square meters for a yard) and started operation on September 15.

The project of securing overseas logistics infrastructure extends to Europe. The Port of Rotterdam in the Netherlands and the Port of Barcelona in Spain are in the list. They are scheduled to operate this year.

Mr. Youngho PARK, the director of the Port&Logistics Planning Division of the MOF, said “Some domestic small and medium companies are having difficulties in exporting after the COVID-19 crisis. We hope the logistics center project will be able to help them. Furthermore, we will continue to work to expand our overseas logistics bases and strengthen the competitiveness of Korea’s logistics industry.”

Any companies interested in using the Port of Probolinggo in Indonesia may contact the Overseas Business Department of BPA(chjh@busanpa.com) for inquiries.