At Kaesong, owners wait for other shoe to dropPAJU, Gyeonggi - Gang Chang-bum, 44, the head of clothing manufacturer 55 & 66 Dot Com Company at the inter-Korean Kaesong Industrial Complex, complains that he wakes up from sleep at least four to five times a night these days.
“I invested 10 billion won [$8.2 million] in this business, including a 7 billion won loan from the bank,” said Gang, whose company has been operating in the joint industrial complex since late last year. “I invested boldly to start a ‘real’ business but ...”
As he drove from his home in Seoul to his factory in Kaesong, he confessed that his business is now losing around 100 million won per month.
In the wake of escalating North-South tensions since the Navy ship Cheonan went down on March 26, business owners at the industrial zone say they are walking on thin ice. Their nerves were shaken further when North Korea announced Monday that it would bar South Korean companies from removing machinery and equipment from the industrial complex, in their aim to keep the project alive.
The Kaesong Industrial Complex was launched after North and South Korea reached an agreement during the inter-Korean summit held in 2000. It is the last remaining point of economic cooperation between the two Koreas.
Around 110 South Korean companies employ 42,000 North Korean workers at factories in Kaesong. The project, however, has been close to a shutdown since Seoul decided to minimize the number of South Koreans staying at the industrial complex.
Gang said that he saw problems even before the ship sank.
“I was only able to employ around 250 North Korean workers, even though I requested 2,570. So a portion of the company’s production was done at Chinese plants. Amid worsening circumstances, the Cheonan situation broke out,” said Gang, adding that he has begun to worry about quality control since the government has minimized the number of South Korean workers who can stay in the area.
Park Hyeon-su, 50, head of an electronic parts company at the industrial complex, has a similar story.
“I feel as though I’m living with a time bomb,” said Park. The tensions have made him start smoking again, two and a half years after he quit.
Park said it’s like working on a roller coaster, with every day changing with the latest news. Even so, he said that he will wait a little longer before doing anything.
“Considering the labor force and quality [of the products], Kaesong Industrial Complex is about 20 percent more competitive than China.”
Manufacturers at the industrial complex gathered on Tuesday to discuss business countermeasures to the post-Cheonan diplomacy. The Kaesong Industrial District Management Committee will hold another meeting today to formulate plans to request the government to create measures to protect companies in the joint industrial complex.
By Lee Sang-jai [email@example.com]