South Korea’s leading steelmaker POSCO and Hyundai Group have embarked on construction of a large-scale distribution center in China’s Hunchun, which borders North Korea.



POSCO and Hyundai held a ground-breaking ceremony for Hunchun POSCO Hyundai International Logistics Complex in Hunchun’s international cooperation demonstration zone, and the ceremony comes two years after POSCO inked a memorandum of understanding (MOU) with the Jilin Provincial Government in July 2010. The logistics center will be built on a 1.5 square-kilometer site (450,000 pyeong), with total investment amounting to 200 billion won ($177.16 million).

POSCO Group’s affiliates - POSCO Engineering and Construction (E&C, 50.1 percent), POSCO China (14.9 percent) - will hold a combined 80 percent share in the distribution center, with Hyundai Group’s affiliates - Hyundai Merchant Marine (HMM, 15 percent) and Hyundai Logistics (five percent) -holding the remaining 20 percent.

POSCO leased the site for 175 yuan (31,000 won, $27.46) per square meter for 50 years and received diverse benefits including infrastructure-wise advantages and tax breaks.

POSCO plans to start the first-phase operation of the logistics center by January 2014 upon completion of warehouse, delivery center, and container storage system construction. In the first year of operation, the logistics center is expected to process 200,000 tons (t) of cargoes, and the volume is expected to expand to 13 million t by 2019, when the second and third stages of construction project are completed.

The distribution center in Hunchun is predicted to serve as a logistics hub, in which grains, raw materials, and apparels produced in China’s northeastern provinces of Heilongjiang and Jilin are shipped to southern China and the overseas markets.

[Written by Hyeok-hoon Jeong - Ha’eun Bang / edited by Soyoung Chung]

By 이지은

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