The South Korean government on Friday said it would establish two private funds worth Won2,000bn ($2.1bn) to invest in ports around the world as part of its plan to boost the country’s global logistics network.
Located between Japan and China, South Korea is trying to turn itself into a logistics hub, with air freight channelled through Incheon airport and ships through Busan port.
The maritime affairs and fisheries ministry on Friday said the state-run Korea Development Bank and Kookmin Bank would each manage a Won1,000bn fund to be invested over the next 15 years.
They will first look at investing in China, India, Italy, Russia, Sri Lanka and Vietnam, using the funds to develop ports and logistics centres.
“To aggressively deal with the growing logistics market and achieve our goal of becoming an Asian hub in the sector, it is necessary to secure financial resources to help domestic logistic companies make inroads into overseas markets,” the ministry said.
The government will give Won300bn over five years to the funds, while the remainder is expected to come from other domestic banks, insurance companies and pension funds.
KDB is aiming for returns of 12 per cent, while Kookmin is more ambitious, targeting the 12-15 per cent band.
The global logistics industry is expected to grow from $6,000bn in 2005 to $9,000bn by 2010, the ministry said.