Masan Free Trade Zone reinvents itself as smart green industrial complex after 50 years

The Masan Free Trade Zone, which opened in 1970 as South Korea's first export free zone, is undergoing a sweeping industrial overhaul after more than half a century. The complex, long known as a base for simple contract manufacturing and assembly work, is now pushing ahead with a full transformation into an advanced smart green industrial complex built around AI-driven manufacturing and clean energy.

According to Changwon City on Friday, the Masan Free Trade Zone was elevated to national industrial complex status in 2024 and then designated a smart green industrial complex in 2025, marking a pivotal turning point in its reinvention. Field implementation has accelerated since the completion of an integrated kickoff briefing for the initiative. A dedicated team — the Gyeongnam Masan Digital Carbon-Free Team — has also been established within the Korea Industrial Complex Corp.'s South Gyeongsang Province headquarters, combining staff seconded from South Gyeongsang Province and Changwon City, and has begun operations.

The most prominent element is the push to digitize factory floors through a manufacturing AI transition academic-industry innovation park. Most of the 123 companies operating within the complex have faced significant barriers to digital transformation, including the high cost of advanced equipment, a shortage of skilled workers, and limited on-site data accumulation.

In response, the city will invest about 6.6 billion won by 2028 to build a shared testbed at Gyeongnam Technopark. Starting this month, 10 companies will be selected in the first year to receive basic consulting, AI solutions tailored to the electrical and electronics sectors, and joint industry-academia-research demonstration support. The program aims to verify on-site productivity gains of at least 5 percent, including reductions in defect rates and lead times.

Plans to build an energy self-sufficiency network in response to global carbon regulations and RE100 commitments have also taken shape. Through a project backed by 20 billion won ($14.7 million) in national government funding, rooftop and idle-site solar installations totaling 12.3 MW will be built in phases by 2029. Once complete, the project is estimated to cut annual electricity costs by about 840 million won.

Concerns about the structural load capacity of aging factories built in the complex's early years have been addressed by requiring contractors to conduct rooftop structural assessments and carry out reinforcement work before installation, eliminating any burden on tenant companies. Questions over rooftop usage rights — a complication arising from the complex's status as a state-owned leased industrial site — have also been resolved through prior legal coordination between the Ministry of Trade, Industry and Energy and local authorities. After a four-year construction phase, an SPC will be established to manage operations for five years, and a "sunshine income" model that channels power generation revenue back into worker welfare is also being developed.

Changwon Mayor Kang Ki-yun said the Masan Free Trade Zone is "a core asset that has driven South Korea's exports and manufacturing industry," adding that the city will "use AI manufacturing innovation and eco-friendly energy as new driving forces to boost the competitiveness of existing industries and ensure the complex makes a leap forward as a future-oriented advanced industrial complex where companies and young talent converge."