May 28, 2008

2929thth ICHCA ICHCA

Contents

I . Current Status of Busan Port

II . Merits of Busan Port

III. Development Strategy

22

Busan : World’s 5th Largest PortBusan : World 5th Largest Port

2nd Largest City in Korea

World’s 5th Largest Container Port

Global Production Base

City of Tourism & Convention

33

3-hour Flight Radius 20 ％ of World’s GDP

25 ％ of World’s Population

Logistics HubLogistics Hub

Largest Manufacturing BaseLargest Manufacturing Base

22ndnd Largest Economy Largest Economy

Busan : Center of Northeast Asia

35 ％ of World Container VolumeEastern Gateway to RussiaEastern Gateway to Russia

44

Busan Port

North Harbor

Gamcheon Harbor

South Harbor

Dadaepo Harbor

Passenger Terminal

Busan New Port

Since 1876 5th Rank Container Port 80% Container Volume in Korea

55

Busan North Port

Gamman & SinGamman Terminal66

International : 1.4 million passengers 2007 Domestic : 1 million passengers 2007

Passenger Terminal

77

Gamcheon Port

Major Port of General Cargo

- Dry Bulk Cargo : Frozen Fish, Foodstuff

88

Busan New Port

Opened January 2006 1st Phase 6 berths in operation

99

Increasing share of throughput handled in NE AsiaNE Asia

Share of Container Volume in NE Asia

2005

35%

2011

38%

2005 2011

100

200

200

400

600

M TEU

70%

85%

680.9

259.3

400.6

140.1

NE Asia WorldWorld NE Asia

Total Port HandlingTotal Port Handling ※ Source :Drewry (2006)1010

1336Qingdao

3572Shanghai

1624Ningbo

Super-hubPort Project

Busan28 52

1633Tianjin

1322Dalian

1111

Large Scale Port Expansion Plan in NE Asia

※ Source : Ports’ homepage

11,000

Volume Trend of Busan Port

9,000

7,000

5,000

3,000

13,000

8,0727,540

2,9422,389

3,8874,251

Total T/Put

T/S T/Put 5,178

11,492

4,792

11,492

3,887

9,453

4,251

10,407

4,792

11,492

5,178

11,843

5,209

12,039

5,811

13,261

2003 2004 2005 20062002 2007

(10.2%)

(11.6%)

TOTAL T / PUT

T/S T / PUT

  (Unit:’000 TEU.%)

1212

2007 World’s Port Ranking

30,000

24,000

18,000

12,000

6,000

27,935(12.7%) 26,150

(20.5%)23,998(2.0%) 21,091

(14.2%)

13,261(10.2%)

10,790(11.7%) 10,25

7(4.9%)

9,900(11.7

%)

Singapore

HongKongShanghai Shenzhen KaohsiungRotterdam Dubai HamburgBusan

※ Source : Ports’s homepage ※ Dubai and Hamburg : Shipping Daily Estimate

< Ranking Change >. Shanghai : 3rd → 2nd. Hong Kong : 2nd → 3rd. Rotterdam : 7th → 6th. Kaohsiung : 6th → 8th

10,700(20.0

%)

  (Unit: ’000 TEU)

1313

As of 2007.

Pyongtaek1.8%

Ulsan2.2%Incheon

9.5%Busan75.6%

Others1.1%

Gwangyang9.8%

x

Status of Domestic Market Share

1414

Busan Port CNTR Trade Volume by Nations

* Coastal included in total

Nation Local T/S Total(share)

Growth over 2006

China 1,501 1,674 3,175(23.9) 9.2

US 1,179 1,098 2,277(17.2) 5.0

Japan 1,057 1,028 2,085(15.7) 4.5

Russia 290 142 432(3.3) 36.6

Canada 127 173 300(2.3) 4.9

Hong Kong 207 75 282(2.1) 0.4

~ ~ ~ ~ ~U.A.E 145 93 238

(1.8) 18.7

  (Unit:’000 TEU.%)

1515

Merits of Busan Port

1616

- Location- Connectivity- Stability- Cost

Strength of Busan Port

Busan

Location

1717

8

Connectivity

◈ ◈ JapanJapan : 60 ports ◈ ◈ ChinaChina : 30 ports ◈ ◈ RussiaRussia : 5 ports

1818

Strength of Busan Port

Strength of Busan Port

□ Natural Safe PortPort Closing Day

Year Busan Port

2007 9.6 HR (0.4 day)

Jan~April. 2008 0 HR

□ Stable Labor Relations - No strike in port operation  - Privatization of Port Worker (’07)

Stability

1919

8

□ Competition in Port Service - 7 Terminal Operators

□ Incentive Scheme - Shipping Line, Shipper, Terminal Operator

□ Productivity - North Port + New Port

Cost

2020

Strength of Busan Port

Development Strategy

2121

Development Strategy of Busan Port

New Port Construction

Distripark Development

Old Port Area Redevelopment

Establishment of BPA

High Value-Added Versatile Port

U-Port

2222

Busan North and New Port

Current

Near Residential Area

CAPA : 6 M TEU vs

ACT : 12 M TEU

Congestion in OPN

Waterfront occupied byCommercial Activity

Current Port New Port

City Area Away from City

CAPA:6 M TEUSvc Upgrade

CAPA : 15 M TEU

Redevelopment ofOld Port Area

Versatile Port

Future

Distripark for Value-added Svc

2323

New Port Construction

2424

2525 ㎞ Present PortPresent Port

New Port

Aerial View of New Port

2525

1st Phase : 6 berths

New Port Project

Total 10 million ㎡ Distripark

Total Capacity of 15 million TEU

Water Depth 16 ~ 18 m

30 Container Berths by 2015 (Berth Length : 10Km)

2626

Construction Plan

27272005 2006 2008 2009 2011 2015

1827

30 (Berth)

63

7

Construction Site View

2828

Terminal Investment Status

Phase 1 (’05~’08)

Phase 2-1 (’08)

Phase 2-3 (’09)

Phase 2-2 (’08)

Phase Berth Open Operator Remark

1 9 2005~2008 PNC(DPW) BTO

2-1 4 2008 HJCL OPERATION

2-2 4 2008 HMM OPERATION

2-3 4 2009 CMA, ZIM BTO

2-4 3 2011 under Evaluation BTO

2-5 5 2015 TBN TBD

Phase 2-4 (’11)

Phase 2-5 (’15)

New Port Hinterland Road & Rail

Road Ⅰ

- Length : 22.99km (4~8 lanes)- Project Period : ’94 ~ ’08- PM : Busan City, GyoungNam Provn.

Road Ⅱ

- Length : 17.1km(4 lanes) - Project Period : ’07 ~ ‘11 - PM : MOMAF

Rail- Length : 38.8km(Single, Double)- Project Period : ’02 ~ ’11- PM : MOMAF, Transportation Min.

. North Port Bridge & Overpass (5.77km) : by 2011 . South Port Bridge (1.92km) : by 2008

Road ⅠRoad Ⅱ

Rail

Access Rail

Highway

Namhae Highway

3030

Distripark Development

3rd : 6.4M ㎡ North Container Terminal

Sorth Container Terminal

2nd : 1.4M ㎡

Wes

t Co

ntai

ner

Term

inal

- Total 10M ㎡ , 3 Stages

1ST : 1.7 M ㎡

3131

Target Business

Applicable Business

Cargo Handling

Transportation

Storage

Exhibition

Multi-Logistics

Int'l Logistics

PackagingAssembling, Sorting

Storage Stevedoring

3232

Incentives in Distripark

Busan New Port

Terminal Distripark

Lease Terms and Conditions

- Lease Period : Max 50 Years

- Lease Fee : 49 cents / ㎡ / Year ※ As of March 2008

Direct Tax - 100 % Exemption for first 3 Years- 100 % Exemption for first 3 Years - 50 % Exemption for next 2 years- 50 % Exemption for next 2 years

Indirect Tax - 100% Exemption- 100% Exemption - Zero VAT- Zero VAT

3333

Europe

ItalyFrance

AmericaUS

CanadaChile

Busan

NE Asia

ChinaTaiwan

SE Asia

ThailandIndonesiaMalaysiaVietnam

Storage, Processing, Consolidation, etc.FCL

FCL

FCL

FCL

FCL

FCL

Advantage

- Lead-time - Lead-time

- O.L.T charge- O.L.T charge

- Processing charge - Processing charge - Managing efficiency- Managing efficiency

- Storage charge - Storage charge

Logistics Model : Regional Distribution CenterLogistics Model : Regional Distribution Center

3434

North Distripark Investment : 1st Stage

North Distripark

by Phase

Tenant CompanySize(㎡ )

Projected Volume

(TEU)Domestic Overseas

1st 3 3 51,879 90,546

2nd 13 13 366,677 244,893

3rd 22 22 367,161 612,046

Total 38 38 785,717 947,485* Overlapping invested companies counted

New Volume from Tenant Companies : 947K TEU

3535

55%37%

Foreign Investment by Nations

3636

China 14

Europe 1

Japan 21

Misc. 2

- Busan Int’l Distribution Center : ’07. 7 ( 30,963 ㎡ )

- Busan New Port Distribution Center: ’08. 4( 37,017 ㎡ )

Opening of Logistics Center in Distripark

3737

Logistics Commerce(e-LC)

eXternal N/W(e-XN)

Government N/W(e-GN)

Korail

Harbor Mgmt.(e-HM)

Ships Store(e-SS)

Port Notice(e-PN)

Trucker

MOCI

Justice Dpt

Customs

MOMAF,SP-IDC

Shipping Line

Shipper

Intl’Network

Financial

Ship Yard

CY, Inland ICD

Air LineTML Operator

QuarantineLogistics EDI VAN

BPA-NET

38

Ubiquitous Port - Single Window

GCTS/GPS Real-timeInformation

RFIDAutomatic

RecognitionSystem

U-Port

3939

Ubiquitous Port - RFID Technology

Redevelopment on Old Port Area

Pier 2

CentralPier

Pier 3

Pier 1

Passenger TML

The 2The 2ndnd Lotte World Lotte World

Busan TowerBusan Tower

Custom’s OfficeCustom’s Office BPABPA Busan StationBusan StationBusan Busan City HallCity Hall

Busan Jin Busan Jin StationStation

◈ Area : 1,424,000 ㎡◈ Period : 2008 ~ 2020◈ Investment : Public + Private

Direction of Redevelopment Plan

Tour/Waterfront ParkPassenger Terminal, Culture Center

Retail Complex, Hospitality

Port and Logistic CenterShipping and Logistics Companies

Commercial CenterFinancing, Telecommunication,

Advanced Technology Center, etc.

4141

Redevelopment Master Plan

4242

< Busan Port VISION >

Ⅰ. Gateway to Northeast Asia Ⅱ. High Value-Added Port

Ⅲ. Ubiquitous Port

Ⅳ. Tourist Friendly Port

4343

BUSAN, Northeast Asia’s Largest Transshipment Hub Port

www.busanpa.comBPA Marketing Dpt. T) 051-999-3065 F) 051-988-8003