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Foreign firm enters Kaesong Complex for the first time

Posted June. 11, 2014 05:17,   


A foreign company will make a foray into the inter-Korean industrial complex in Kaesong, North Korea for the first time.

South Korea’s Unification Ministry said on Tuesday, “Groz-beckert, a German company producing industrial needles for the textile industry, submitted an application to enter the Kaesong Industrial Park in the form of a sales office (a firm that provides goods and service to companies in the industrial complex), and we gave approval.” The company plans to hire two North Korean workers to sell needles to firms producing clothing and shoes in the complex.

A source in the South Korean government said, “This company is not making investment in production facilities such as plants in the complex, but apart from this firm, three companies, including a German shoemaker, a Russian fisheries processing firm, and a Chinese company producing artificial nails for nail art, submitted us specific plans to build plants and production facilities at the Kaesong Industrial Park.” The three companies have reportedly expressed their intention to immediately enter the complex, once the issue of "daily unrestricted travel" is addressed. The travel permission allows the move back and forth between the South and the North on designated travel dates, out of the "three clearances (travel, telecommunication and customs clearance)."

South Korea’s May 24, 2010 measures have banned firms from making new investments in North Korea. As for sales offices, about 50 Korean firms have advanced into the complex since those offices do not constitute investment facilities. However, due to the May 24 measure, no company has constructed new plants in the complex. If the three foreign firms build plants in the joint industrial complex, and the internationalization of the complex accelerates, the May 24 measures will be effectively lifted in phases. More than 20 companies have inquired the South Korean government about their possible entry into the inter-Korean industrial park.

On Monday, Seoul proposed to hold an inter-Korean joint committee of the industrial complex on June 19 to Pyongyang in order to deal with the three clearances issue and investment guarantee system. The North has yet to respond to the South’s request for the dialogue since the South Korea-U.S. joint military drill in February.