South Korea’s Busan Port Authority will build a logistics center near the Port of Rotterdam in the Netherlands, the gateway to Europe, to mainly serve Korean companies with European operations.

Busan Port Authority said on Wednesday that it signed an agreement with the Port of Rotterdam Authority at Busan Port International Exhibition & Convention Center in Busan, Korea’s biggest port city in the southern coast, to build a logistics center in a complex near the Port of Rotterdam.

Under the agreement, the Korean authority will invest 23.2 billion won ($19.7 million) to build a 30,000 square meter logistics/distribution center on a site inside 50,000 square meter Maasvlakte area at the Port of Rotterdam, the largest port in Europe. Busan Port Authority will lease the land for the distribution center from the Port of Rotterdam for 50 years at an annual rent fee of 683 million won.

Busan Port Authority aims to complete designing of the logistics center by the end of this year before breaking ground for construction in June next year and beginning operation in March 2021. It will directly manage half of the center while renting out the remaining to private operators. The authority’s Europe headquarters in Rotterdam will be in charge of operating and managing the center.

The new distribution center in Europe’s biggest port is expected to help Korean logistics firms and trading companies enhance competitiveness, said Busan Port Authority. Busan Port Authority expects it can help ease the cost burden of Korean companies in Europe by offering storage fees at a 10 percent cheaper rate than those offered by foreign facilities. Korean companies with European operations currently lease space of logistics and distribution centers run by non-Korean operators.

Following the distribution center in the Netherlands, Busan Port Authority will speed up the plan to build distribution centers in Japan and Southeast Asia as part of efforts to go global. ​

By Park Dong-min and Lee Eun-joo

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