Additional S. Korean firm in Kaesong halts production under N. Korean entry ban

With North Korea preventing workers and cargo from the South from entering the inter-Korean industrial park in Kaesong for the fourth day, an additional South Korean company there has halted operations, the unification ministry here said Saturday.

The ministry said the company, which produces machinery, had stopped its manufacturing for its lack of raw materials.

Since the North imposed the ban on Wednesday, four South Korean firms have suspended their operations, the ministry added.

In the past four days, the North has only allowed South Koreans already in Kaesong to leave.

According to the ministry, 92 South Koreans have returned home on Saturday. Kim Jin-ho, the first returnee on Saturday, told reporters that the atmosphere inside the Kaesong complex was "tranquil" and that he'd worked as he normally would.

"The security has tightened in the North, but I haven't received any order to leave the complex (for good)," Kim said. "Our company is still in operation because we have some materials left. But in the next three to four days, we will probably reach a critical point."

According to the ministry, 516 South Koreans were currently staying in Kaesong as of Saturday afternoon. There are no cross-border trips on Sundays. For Monday, 12 South Koreans have informed the ministry that they'd like to return home, the ministry said.

A ministry official said South Korea has been contacting North Korean counterparts to push for the normalization of the border travel.

Also on Saturday, the association representing South Korean firms in Kaesong urged the government here to engage in direct talks with the North to resolve the issue.

Officials of the association said they had had a meeting with Unification Minister Ryoo Kihl-jae earlier in the day and stressed the importance of stabilizing operations in Kaesong.

"We highlighted the economic role the Kaesong Industrial Complex plays in terms of creating new jobs for small and medium business in South Korea," the association said in a statement. "We also told Minister Ryoo that the Kaesong complex helps the Koreas improve their relations and reduce tension."

The association said factories in Kaesong have been sharing their raw materials to stay in operation.

According to the ministry, Ryoo conveyed his "deep concerns" about difficulties that the South Korean manufacturers are facing in Kaesong and reaffirmed the South Korean government's commitment to ensuring normal operations there.

The minister also stressed that the government and the companies must remain in close coordination to handle the ongoing situation, according to the ministry.

Ryoo had said on Friday that South Korea wasn't considering pulling its nationals out of Kaesong. He reasoned that the situation isn't so serious as to present a threat to South Koreans' security in the border town.

In Kaesong, 123 South Korean firms have built factories to produce light industry goods using cheap North Korean labor.

The two Koreas signed an agreement on creating the complex in August 2000, and the groundbreaking followed three years later. The first goods were first produced at the market in late 2004. The South has invested 900 billion won (US$802 million) into Kaesong so far with combined output reaching $2.01 billion.

Before refusing to let South Koreans into Kaesong, Pyongyang had earlier threatened to shut down the complex. The North accused Seoul of "insulting the dignity" of the North's leadership by claiming that Pyongyang was only allowing the industrial park to remain in operation, under escalating tensions, because it was a source of foreign currency.

[Yonhap]