Busan Port Authority Creates 600 Billion KRW Production Induced Effect Through Localization of Port Equipment

9 Anbyeok Cranes, 46 Yard Cranes Ordered Domestically

[Asia Economy Yeongnam Reporting Headquarters, Reporter Yoon Yoseop] The production inducement effect of domestic orders for 9 quay cranes and 46 yard cranes to be installed in phases 2 to 5 of Busan New Port is estimated at 641.7 billion KRW, with a value added of about 211 billion KRW and the creation of 2,386 jobs.

Busan Port Authority (BPA) announced on the 22nd the results of an analysis conducted with experts from the shipping and port industry on the production inducement effect of domestic orders for quay cranes and yard cranes for phases 2 to 5 of the New Port, which were ordered last October.

Busan Port, ranked first domestically and sixth globally among container ports, has played a key role in leading South Korea's import-export trade and regional economy, but most of its basic infrastructure port equipment relies on imports.

According to BPA's own survey conducted last December, all 69 quay cranes currently installed at the New Port are Chinese-made products. In contrast, at the North Port ordered by the government, 42 out of 47 cranes, or 89.4%, are domestically produced, showing a significant difference from the New Port.

Except for seven domestically produced replacement quay cranes damaged by Typhoon Maemi in 2003, not a single domestic equipment unit has been supplied so far. This is analyzed to be due to being outcompeted on price by Chinese companies.

BPA decided to directly order port equipment for the newly constructed phases 2 to 5 of the New Port to actively foster the domestic equipment industry and revitalize the regional economy. Based on this analysis, BPA plans to directly order phases 2 to 6, which will be constructed additionally in the future, to promote domestic parts localization and the development of related equipment industries.

Nam Ki-chan, President of BPA, said, “The current global port equipment market is about 7 trillion KRW, but our companies' market share is only 1.7%. If we expand the market through win-win cooperation with our companies by creating a growth foundation through domestic orders and localization, it is expected that a market entry effect of about 1 trillion KRW will occur.”

Analysis of the Economic Ripple Effects of Domestic Orders and Localization of Cargo Handling Equipment at Busan Port. (Photo by Busan Port Authority)